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Alitalia Reports Offer for a Budget Carrier MOVERS MARKETPLACE By Bloomberg

Posted on: Monday, 30 January 2006, 12:00 CST

Alitalia said over the weekend that it had bid as much as 38 million for the rival airline Volare Group, to expand its low-cost flights in Italy. Alitalia said in a filing with the stock exchange on Saturday that it made the "irrevocable" offer, the equivalent of $46 million, on Dec. 28. The acquisition would allow the airline to compete with other low-cost flight carriers but would not change its financial plan and would not include assuming Volare's debt

. Volare declared insolvency in 2004, stranding passengers from Paris to the Maldives. Magistrates in Milan are investigating the carrier's finances. The airline restarted some flights in April. Alitalia's other rivals, including Air One, Italy's second-largest airline, have complained to the European Union's transport commissioner, Jacques Barrot, that Alitalia should be prevented from buying Volare because it was in a financial crisis and had received funds from the government, The Financial Times reported last week. Alitalia last month sold 1 billion of new shares to stay in business. A weeklong strike that ended last week cost it 10 million a day, said the Italian labor minister, Roberto Maroni. Workers were protesting a plan to give control of Alitalia's services unit, which has 9,000 employees, to Fintecna, the government holding company.

Source: International Herald Tribune

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