Lack of agreement sees Alitalia Air France-KLM partnership ending in 2017

When Alitalia signed ancillary and joint venture agreements with Air France-KLM back in 2009 and 2010 the airlines strategic and economic situation was very different to what it is today. With Etihad Airways taking a 49% stake in the airline in January this year the situation changed and the agreements with Air France-KLM which are due to end in 2017 will not be renewed under current terms. Presently Air France, who were once a major shareholder in Alitalia, now hold only a 1% stake. According to Alitalia CEO, Silvano Cassano, “These agreements are no longer beneficial, either commercially or strategically, to the new Alitalia and its ambitious turnaround plan. They were negotiated when Alitalia was in a very different position, with the result that the agreements in their current forms favor the other party.”
Cassano then went on to say that he felt the agreements were “undermining” Alitalia’s efforts to restructure its network with the principal aim of winning back traffic while also supporting the cargo needs of the Italian manufacturing industry. As part of Alitalias restructuring at the beginning of the year they also joined Etihad Airways’ network of equity partners which includes Air Serbia, Air Seychelles, airberlin, Etihad Airways, Etihad Regional operated by Darwin Airline, Jet Airways and NIKI. “We have indicated to Air France-KLM that we are willing to discuss more equitable arrangements that benefit all the parties involved, but thus far we have been unable to achieve this result. We remain open to further discussions to achieve a mutually acceptable solution. However in the interest of transparency and certainty for all parties, we felt it necessary to announce our intention not to renew these agreements under the present conditions,” Cassano concluded.
The Air France-KLM/Alitalia tie-up covers passenger services between France, the Netherlands, Italy, and further afield – in addition to the marketing, sales and distribution of Alitalia’s belly capacity which is currently being handled by Air France-KLM. At the present moment it is not clear if this announcement will have any implications regarding Alitalia’s SkyTeam membership and its transatlantic joint venture with Air France-KLM and Delta Air Lines.