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Delta Air Lines Inc. and U.K. discounter EasyJet Plc may invest as much as 400 million euros ($452 million) total in the latest attempt to revamp struggling Italian airline Alitalia SpA, according to people familiar with an initial draft of the plan.

Investors in a group led by rail operator Ferrovie dello Stato SpA are evaluating the financial needs of the “new Alitalia” that would emerge after the second bankruptcy process in a decade, said the people, who asked not to be named because the discussions are private.

Under consideration: a capital injection by investors totaling about 1 billion euros, the people said. The plan will be discussed with Delta and EasyJet this week and could be finalized by the end of February, they said.

At the core of the proposal is setting up a new company following the bankruptcy process that started in 2017. The new Alitalia would retain assets from the previous carrier, but debt wouldn’t be carried over, according to the people.

As part of the deal, Delta and EasyJet may get up to 40 percent in the new company, with the rest divided among companies controlled by the Italian government, the people said. Representatives for Ferrovie and EasyJet declined to comment, while Delta didn’t immediately respond to a request for comment by phone and email during a U.S. holiday.

State Holding

Ferrovie may hold about 30 percent of the company, with the Italian Treasury holding a minority stake. The size of that stake would depend on the level of involvement of other state-controlled companies, such as Poste Italiane SpA, they said. The Treasury’s shareholding could be between 15 percent and 25 percent, one of the people said.

For the former flagship carrier, which missed out on the waves of consolidation that swelled the size of one-time peers Air France-KLM, Deutsche Lufthansa AG and International Consolidated Airlines Group SA’s British Airways, this could be the last chance to avoid liquidation.

While the Italian market remains of interest to competitors, Air France in recent weeks pulled out of the Alitalia stakes altogether, while Lufthansa was only interested in a smaller and restructured carrier, the people familiar said.

With an investment in Alitalia, Delta and EasyJet could gain influence in the Italian market, with the U.K. carrier mainly interested in European routes and Delta eyeing Alitalia’s overseas operations, the people said. EasyJet is seeking commercial agreements and code-sharing opportunities, while Delta could look to boost Alitalia’s flights to North America, they said.

Teaming Up

The two airlines confirmed last week that they’re interested in potentially teaming up to run the Italian carrier along with Ferrovie. EasyJet said then talks will be focused on “forming a consortium to explore options” for the Italian carrier’s future operations.

The clock is ticking for Alitalia as it burns through a 900 million-euro state loan. The airline halved its loss before certain items to 154 million euros last year, according to union Uil Trasporti.

–With assistance from Daniele Lepido, Chiara Albanese, Ruth David, Lorenzo Totaro, Irene García Pérez and Brendan Case.


©2019 Bloomberg L.P.


This article was written by Ruth David, John Follain, Sonia Sirletti and Tommaso Ebhardt from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

Photo Credit: Progress is being made on the rescue plan for Alitalia. Bloomberg