Dutch Minister hopes for merger of Alitalia and Air rance-KLM

By Margarita Snegireva. Dutch Finance Minister Wouter Bos said on Tuesday he hoped talks on the expected takeover of loss-making Italian carrier Alitalia by larger peer Air France-KLM would go ahead even if the Italian government fell.

"I hope that in the European single market business can proceed even if a government collapses," the Dutch minister told reporters when asked about the implication of an Italian government crisis on the Alitalia talks.

Italy's government looked on the verge of collapse on Tuesday after an ally of Prime Minister Romano Prodi deserted the centre-left coalition.

Alitalia - Linee Aeree Italiane is the flag carrier airline of Italy. Headquartered in Rome, it operates services to 28 domestic and 74 international destinations. The airline's hub is Leonardo Da Vinci International Airport, Rome. Although Malpensa International Airport, Milan is currently one of Alitalia's hubs, it is in the process of being downgraded to a focus city. The transition should be complete by April, 2008, leaving Leonardo Da Vinci International Airport, Rome as the airline's only hub.

By the 1990s, Alitalia was carrying 25 million passengers annually. In 1997 it set up a regional subsidiary Alitalia Express and in 2001 became a member of the SkyTeam Alliance. In November 2003 Alitalia announced that it would cut 2,700 jobs over the next three years to prepare the airline for a merger with Air France and KLM. In April 2004 Alitalia acquired the bankrupt regional airline Gandalf Airlines to gain additional slots at several European airports, mainly in Milan (Linate) and Paris (Charles De Gaulle).

Alitalia employed 18,182 staff as of March 2007.

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