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December 2, 2008 11:19:57 AM CST

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Air France Offers Alitalia $1B Boost

Posted Dec 17, 07 8:26 AM CST in Business 

(Newser) – Air France-KLM Group sweetened its bid for troubled Italian airline Alitalia today with a plan to raise $1.08 billion to upgrade aircraft and relaunch the brand, and a vow not to cut jobs. Air France is competing with Italy's No. 2 air carrier, Air One, to buy out the Italian government's 49.9% stake in the airline, which has posted losses 9 years running.  Air One’s plan offered a larger investment but would cut 2,000 jobs.

An analyst called Air France-KLM’s offer more realistic, saying “Air France is more experienced with turnaround situations after its own turnaround in the 1990s, and with mergers following its purchase of KLM in 2004.” Alitalia’s chairman and a major pilot union support the bid, but some politicians and business leaders want the company to remain in Italian hands, reports Bloomberg.

Source Bloomberg

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A general view of empty Alitalia airline check-in counters during Italian airline's flight attendants 24-hour strike, at Rome's Fiumicino international airport, Thursday, May 3, 2007. (AP Photo/Gregorio...   (Associated Press)
Undated photo released by Air France, Thursday Dec. 6, 2007 showing the tails of an Air France plane, on the left, and an Alitalia plane, Charles de Gaulle airport, outside Paris. Air France-KLM, the...   (Associated Press)
A passenger looks at the Alitalia electronic check-in machine at the Linate airport in Milan, Italy, Wednesday, July 18, 2007. (AP Photo/Luca Bruno)   (Associated Press)
Alitalia jets are parked at Rome's Fiumicino airport, in this April 11, 2004 file photo.   (Associated Press)
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