sky

The Italian economy ministry on Wednesday said it would appoint former Treasury official Antonino Turicchi as chairman of state-owned carrier ITA Airways, the successor to Alitalia. Turicchi, who also sat on the board of state-controlled bank Monte dei Paschi di Siena, is currently the CEO of FINTECNA, a financial holding company controlled by state lender Cassa Depositi e Prestiti. At ITA Airways, he will take the place of Alfredo Altavilla, who resigned earlier this month after a clash with several board members over strategy to complete the privatisation of the airline. In August, the Treasury picked a group led by U.S. private equity fund Certares, backed by Air France-KLM and Delta, for exclusive talks on buying a majority stake in the carrier. The consortium beat a rival bid presented by shipping group MSC and Germany's Lufthansa. The exclusivity period ended last month but talks over a potential sale agreement are continuing.<br/>

Air France-KLM’s French arm faces possible strikes throughout the year-end holiday as workers step up pressure to adjust salaries in the face of spiraling inflation. Two Air France cabin crew unions issued a strike notice from Dec. 22 to Jan. 2, according to statements posted on their websites on Wednesday. Air France said it questions the logic of the strike notice, given new salary negotiations are already underway and will continue beyond January, a spokesman for the group said by email. The carrier “will pursue dialog” with worker representatives in the same way it has done previously, he said. The possibility of disruptions at Air France comes at a time European carriers have struggled to expand their services amid rising travel demand, while airports like Amsterdam’s Schiphol and others in the UK. grapple with labor shortages. Air France was successful in avoiding strikes in recent months during a summer of chaos for travelers throughout Europe. Other companies in France also faced disruptions recently in a series of protests against the rising cost of living. Strikes by oil refinery workers disrupted fuel distribution last month, causing shortages at filling stations across the country. Thousands of people joined demonstrations in Paris on Oct. 18 to demand a bigger share of corporate profits. Air France-KLM dropped as much as 15% in Paris trading, its biggest decline in more than two weeks. <br/>

Air France-KLM on Wednesday raised just over E300m by issuing subordinated bonds convertible into stock, seeking to strengthen its capital and pay back state aid but sending its shares plummeting. The shares plunged 13% shortly before the market close due to investor concerns about potential dilution for current shareholders. Air France said in February that it was considering options for raising of up to 4 billion euros of capital, including a rights issue and quasi-equity debt issues. The operation on Wednesday is part of that plan. "This transaction marks a further step in the group's initiatives to accelerate the repayment of French state aid, continue to strengthen equity capital and help optimise financial costs," the company said. The bonds, which can be exchanged into existing Air France shares as well as converted into new shares, were offered through a placement to qualified investors, the airline said. Holders can convert the bonds into stock over a 10-day period that begins 40 calendar days after the issue date under a specific formula, the company said.<br/>