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21 March 2012
On January 25 2012 the board of directors of Alitalia Compagnia Aerea Italiana agreed to begin the process of finalising a merger with Blue Panorama Airlines SpA (BPA) and Wind Jet SpA. The prospective merger is consistent with a worldwide trend in air transport. Numerous mergers and acquisitions have been completed over the past few years as air carriers have responded to an uncertain economic environment by seeking to enhance their competitiveness and reliability on the market.
In planning to combine its activities with those of BPA and Wind Jet, Alitalia aims to offer customers improved services and to increase the flow of international tourist travel to and from Italy. Alitalia sees the two companies as suitable targets in view of their current market share, their fleets and the routes that they operate in Italy and abroad.
BPA is based in Rome and Milan. It operates scheduled and non-scheduled flights under the Blue Panorama brand for intercontinental routes and as Blue Express on domestic and EU routes. In 2011 its fleet of 12 Boeing aircraft carried almost 2 million passengers. It has the second-largest long-range Italian fleet after Alitalia. BPA also provides executive flights under its Executive Blue brand.
Wind Jet provides scheduled and non-scheduled flights and is based in Catania, Palermo and Rimini. It operates a 12-strong Airbus fleet and, like BPA, a further two aircraft for its executive service. In 2011 Wind Jet carried more than 2.8 million passengers on domestic services and international routes to EU destinations and beyond.
Alitalia is the leading Italian air carrier, based in Rome, Milan, Turin, Venice, Bari and Catania. In 2011 it carried 25 million passengers. It has a fleet of 144 aircraft, including those operating as Air One.
Alitalia is understood to be carrying out due diligence exercises to assess the practicability of the deals and the appropriate terms and conditions. The mergers would probably be structured as asset deals, which would result in an increase in Alitalia's share capital; Alitalia would become the direct or indirect assignee of each target's entire aviation business, including aircraft, employees, contracts, software, equipment, trademarks, traffic rights, air operator certificates and air carrier licences. However, it is expected that the carriers in question would continue to operate on the market as separate brands.
Closing of the transactions will be subject to two conditions:
A national consumer association has already asked the authority to refuse authorisation. It is alleged that the contemplated mergers could lead to restrictive business practices, to the potential detriment of passengers. In particular, it is claimed that Alitalia - which would see its position as the leading Italian carrier further strengthened - would be in a position to apply predatory pricing strategies in order to reduce significant competition on certain routes (particularly to and from Sicily and southern Italy), and to fix price policies for its own exclusive benefit.
For further information on this topic please contact Laura Pierallini at Studio Legale Pierallini e Associati by telephone (+39 06 88 41 713), fax (+39 06 88 40 249) or email (email@example.com).
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