Russian Carrier Seeks to Buy Alitalia

The national Italian airline has been in financial trouble for quite some time—it lost $540 million in 2006—and has been the source of rumors of takeover bids by other airlines such as KLMAir France, none of which have born fruit. Provisions of a purchase pushed by the government include maintenance of certain routes within the country and abroad as well as preservation of the airline's Italian identity of the airline.

Now the Russian carrier, Aeroflot has joined in the bidding for the Italian government's holdings in Alitalia. Aeroflot is joining with Unicredit, an Italian bank, in its bid. Others in serious contention are a financial consortium that includes the U.S.-based private equity firm, Texas Pacific Group (TPG) and Mediobanca, an Italian bank. Rounding out the field is AP Holdings that has a relationship with Alitalia's largest domestic competitor, Air One, that partners with Lufthansa. The entire matter could be settled by July.

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