Air France in talks with Alitalia to acquire carrier

Air France has held talks with Alitalia about entering the race to acquire the ailing Italian flag carrier, a decade after its efforts to purchase its peer were scuppered by political opposition.  According to people familiar with the matter, Alitalia’s government-appointed commissioners met AF-KLM executives in Paris last week to discuss the Franco-Dutch airline’s interest in joining the auction, possibly through a joint bid with easyJet, the British low-cost carrier. AF-KLM’s arrival on the scene marks a new twist in the long-running saga surrounding the fate of Alitalia, turning control of Italy’s skies into a key battleground in the European airline sector. The Italian airline collapsed into bankruptcy last year, after employees rejected a deal on salary and benefits proposed by the company, in which Etihad, the UAE-based carrier, had a big investment. Now under government control, the airline has been trying to draw out potential buyers, but struggled to find a palatable option. A potential joint offer from AF-KLM and easyJet would join Lufthansa and Cerberus Capital Management, the private equity group, as the most likely contenders to buy Alitalia. This month, AF-KLM denied that it had already made a bid for Alitalia, but it did not rule out any interest in doing so in the future. People familiar with the situation say that AF-KLM may be feeling squeezed between Lufthansa and IAG, which owns BA and has a foothold in Italy through Vueling, the Spanish low-cost airline, so it may not want to sit out the Italian contest. <br/>