Italy’s latest plan for Alitalia aims to get Lufthansa on board

Italy’s newest attempt to rescue failed airline Alitalia has one main objective: rope in Lufthansa. The government last week tasked Alitalia’s new management team with drawing up a business plan that will satisfy Lufthansa’s demand for restructuring at the money-losing airline in exchange for a role in running it, people familiar with the matter said. In a Nov. 19 letter to the government, Lufthansa made a series of requests including shrinking Alitalia’s fleet by about 30%, said the people, who asked not to be named discussing sensitive deliberations. In the letter Lufthansa said it would possibly be open to an equity investment of as much as E160m. It would also be prepared to pay Alitalia as much as E50m for its decline in revenue in moving from the Sky Team group to Star Alliance, the people said. The German carrier’s interest is conditional on Alitalia’s profitability, according to the people. “We have always said that we are interested in a restructured Alitalia,” a spokesman for Lufthansa said. “We could also imagine conventional partnerships with Alitalia.” While the Lufthansa letter didn’t mention redundancies, it did discuss the possible sale of Alitalia’s baggage-handling unit and plans for cost savings at its maintenance division, the people said.<br/>