May 16, 2017 / 3:56 PM / 6 months ago

Air France-KLM won't save Alitalia, CEO says

PARIS (Reuters) - Air France-KLM has ruled out stepping in to save near-bankrupt Alitalia, with its chief executive telling shareholders on Tuesday that its past experience of cross-shareholdings and a failed merger plan would discourage it from investing directly in Italy again.

Jean-Marc Janaillac, Chairman and Chief Executive Officer of Air France-KLM and Chairman of Air France, attends the group's 2016 annual results news conference in Paris, France, February 16, 2017. REUTERS/Christian Hartmann

In 2008 Air France-KLM walked away from a planned takeover of Alitalia after talks with the Italian carrier’s unions broke down.

Earlier this month Alitalia went into administration for the second time in less than a decade after workers rejected a restructuring plan.

“I don’t think the past experience of either KLM or Air France in their relations with Alitalia encourages us to repeat the experience of a direct presence in Italy, especially since Alitalia’s market share in Italy and Europe and in long-haul have fallen sharply and we can capture the Italian market through our CDG (Paris) and Schiphol (Amsterdam) hubs,” said Air France-KLM Chief Executive Jean-Marc Janaillac.

“We will watch what happens with the administrators in the next six months and adjust our position accordingly,” he told an annual shareholder meeting.

Alitalia remains a partner in the Franco-Dutch group’s North Atlantic joint venture with Delta Air Lines (DAL.N).

Reporting by Cyril Altmeyer, Tim Hepher; Editing by Greg Mahlich

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