Berlusconi wins, Alitalia loses

With Silvio Berlusconi’s expected victory in this week’s elections, Air France-KLM is “poised to walk away from a deal” to acquire failing and flailing state airline Alitalia, reports the Telegraph. Berlusconi has expressed his hostility to the proposed deal, already on the rocks due to union opposition, calling it “unacceptable and, indeed, offensive for our [...]

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“Good feelings won’t pay Alitalia’s bill, and with Berlusconi’s impending government likely to hobble Alitalia’s chances of being acquired, bankruptcy does seems inevitable.”

My article about the Alitalia privatization debacle — and how it’s being complicated by next week’s elections in Italy — is now up at Forbes.com.

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“If airlines aren’t healthy enough to survive, governments should let them go. Don’t try to prop them up.”

Wise words from The Cranky Flier regarding government impulses to bail out failing airlines. Let the market work; it does a great job of responding to demand and generating better service than a nearsighted embrace of the status quo does.

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