Delta May Be Frontrunner in Talks for Alitalia Deal: Stampa

(Bloomberg) -- Italian executives will meet with Delta Air Lines Inc. managers in Atlanta to discuss a potential transaction with the country’s bankrupt flag-carrier Alitalia, La Stampa reported, citing an unidentified official familiar with the plan.

The Italian government may favor a deal for Delta over Deutsche Lufthansa AG because it would be easier to implement and wouldn’t require job cuts, the newspaper cited the official as saying. Alitalia’s partnership with Delta would involve mainly long-haul flights to the U.S., while a deal with Lufthansa could focus on the Italian market, according to Stampa.

National railroad operator Ferrovie dello Stato Italiane has been given the task of conducting the negotiations and some of its executives will be making the trip to Atlanta next week, according to Stampa. Delta spokesman Trebor Banstetter declined to comment on the report.

Read more: Italy’s Ferrovie to Draft Plan for Alitalia by Jan. 31

Ferrovie executives need to submit to the Italian government an industrial plan for Alitalia, including a deal with another carrier, by the end of February, the daily said. EasyJet has a less attractive proposal that includes buying part of Alitalia’s fleet and using a small number of its personnel, according to Stampa.

The multiple bids raise the prospect of Alitalia gaining multiple owners, with EasyJet bringing its expertise to bear on short-haul operations, and Atlanta-based Delta helping to run lucrative long-haul flights out of Milan and Rome. Ferrovie would most likely act as an anchor investor. Delta President Glen Hauenstein was Alitalia’s chief commercial and operating officer from 2003 to 2005. The U.S. carrier is a long-standing partner of Alitalia as part of its trans-Atlantic joint venture with Air France-KLM.

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