Delta Makes Offer To Acquire Alitalia – Could Air Italy Get A New Competitor?

Alitalia has been in financial difficulty for quite some time now. It has been propped up by Etihad for quite some time now, owning a 49% share in the airline. Of course, Eithad isn’t currently in the strongest financial position itself right now. Alitalia declared bankruptcy in April 2017, when it was reportedly loosing up to €500,000 a day. Now, Reuters is reporting that administrators have lined up two bids, and one expression of interest in purchasing the failing Italian flag carrier. One of these three interested parties is reportedly Delta, in addition to EasyJet, and the Italian state railway. It is also expected that the Italian government will take a stake in the airline.

Alitalia
Alitalia

Competition With Gulf Carriers

Time and time again the American legacy carriers complain about unfair competition from the Gulf carriers. Recently Qatar Airways threatened to leave the One World Alliance following reports that fellow alliance member American Airlines was mistreating it. Purchasing a stake in Alitalia would enable Delta to directly compete with Qatar Airways who own a 49% stake in Italian airline Air Italy. As one of our 5 new airlines to watch in 2019, we expect Air Italy to do well. In fact, the new airline is expecting to operate a fleet of 50 aircraft by 2022 with 18 B737-MAX8 aircraft on order. With the backing of a major carrier like Delta, Alitalia could potentially pick itself up and provide some serious competition to both Air Italy and Qatar.

air italy
Acquiring Alitalia would put Delta in the perfect position to compete against Air Italy, owned by the company’s rival Qatar Airways.

One Of Three Bids

Delta’s bid for the airline is not to only one. It is one of two binding offers received by administrators. The other coming from the Italian state railway company. Delta has not commented on any speculation that it was the second company to place a firm bid for the airline, however, a source close to the airline told Reuters that it had. EasyJet has reportedly placed the third and final bid, however, this is an expression of interest for Alitalia in a restructured form.

Delta is also reportedly looking to invest in the struggling Indian carrier Jet Airways. It would reportedly buy the 24% stake owned by Etihad. This would be in addition to the 51% owned by the airline’s current CEO. This is another acquisition which could allow the American airline to take on the big three in the Gulf.

delta airlines
Delta is reportedly also interested in purchasing a controlling stake in Jet Airways

What do you make of the news? Do you think Delta will acquire Alitalia, Jet Airways, or both? Let us know in the comments down below!

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