Alitalia Joins Air France-KLM, Delta Alliance

Bruce Barnard | Jul 06, 2010 10:09AM EDT

Alitalia, Italy's national airline, joined the trans-Atlantic alliance between Air France-KLM and Delta Air Lines.

The four carrier alliance will have a 26 percent share of the trans-Atlantic market generating annual revenue of $10 billion.

The airlines will also gain access to Europe's second largest air cargo market which has been dominated by independent Italian airlines such as Cargoitalia and foreign carriers which moved in after Alitalia shed its unprofitable cargo business following its bankruptcy in 2008.

The carriers are already partners in the wider global SkyTeam alliance.

Alitalia's chief executive Rocco Sabelli hailed the alliance agreement as a key development in Alitalia's revival since it emerged from bankruptcy in early 2009.

The alliance will share costs and revenue and co-operate on capacity, cargo and marketing.

Alitalia, which was re-launched by Italian investors who merged the carrier with its smaller rival Air One, will post positive results in the second half of 2010 after a good improvement in the first half over 2009, Sabelli said.

Alitalia plans to break even at an operating level by the end of 2011, a year behind schedule.

Pierre-Henri Gourgeon, chief executive of Air France-KLM, which acquired 25 percent of Alitalia for $370 million in 2009, said the carrier is prepared to discuss an increase in capital if necessary.

Sabelli said Alitalia does not need extra funding as it has $615 million in cash and access to credit lines.

The alliance does not envisage an eventual Alitalia merger with Air France-KLM, Sabelli said.

By The Numbers: European Airlines Freight Traffic.