Summary
The market has taken a dim view on that move by pushing down a 7% the price of Air France KLM shares.
Analysis
To outside observers it seems as if, in his exasperation regarding the size and intractability of the problems posed by the flag carrier, the Italian PM has personally undertook the role of a peddler with the aim of finding somebody else capable to assume the heavy burden that, the Government itself, has been unable to bear.
As a result of the open and even aggressive pressure administered to the AF-KLM Group through an interview with the French newspaper Le Figaro, the Italian PM Mr. Prodi has launched what it amounts to a kind of ultimatum by requiring knowing “Air France’s real intentions”.
However, Air France KLM CEO, who holds himself responsible for the jobs of over 100.000 workers, seems to be not an easy prey to political pressures from his own country and -it may be assumed- it will less be so if the push is coming from East of the border.
Obviously, nobody in his right mind will throw overboard the present and future of a rather streamlined, profitable and successful air carrier, such as the current Air France KLM Group is, just for the sake of satisfying the personal whims of foreign politicians.
Obviously, when parents want to find an adequate suitor to the bride, they have first to spend time, efforts and money in grooming her properly.
If the State owner continues to postpone the full privatization of its flag carrier maintaining its usual political interference, and if Alitalia is unable to structure a reasonable financial turnaround, is not prepared to offer and accept a shared strategic vision and if synergies cannot be derived from a merger with Air France KLM, then much more than just political pressure from Rome, and even a miracle, will maybe be required to convince this or any other potential rescuer.
