Air France already owns 25 percent of Alitalia bought for 323 million euros ($438 million) in 2009 and has resolved to decide whether to boost the holding by the years end. The Italian companys board, which loses its veto over investments on Oct. 28, will meet Sept. 26 to study plans to raise cash that might entail a capital increase involving Air France, a second person said. Both asked not to be named since talks are private. For Air France-KLM, already Alitalia s biggest shareholder, taking full control of its Skyteam alliance partner would help lock in access to one of Europes largest aviation markets. Counting against a purchase are the Italian companys mounting losses and Air Frances focus on reviving short-haul operations, which might make a deal involving a third-party such as Abu Dhabi-based Etihad Airways PJSC more likely, according to Donal ONeill, an aviation analyst at Goodbody Stockbrokers in Dublin. There would be some sense in Air France looking to increase their holding together with Etihad, said ONeill, who has a hold rating on Air France-KLM, Europes biggest airline. Air France by itself isnt exactly flush with cash at the moment and Etihad has aspirations to grow in Europe. Asian Links Air France-KLM spokesman Cedric Leurquin declined to comment on Alitalia and said he couldnt immediately confirm the date of the next board meeting. A representative of Rome-based Alitalia, where losses quadrupled to 280 million euros in 2012, declined to comment. Etihad, the third-biggest Gulf carrier, has been an ally of Air France since a pact in 2012, and may be a potential Alitalia investor after taking stakes in European operators including Air Berlin Plc (AB1) and Aer Lingus Group Plc. A tie-up would enhance Italy s connections with Asia via Abu Dhabi, complementing links to the west through Air France-KLM bases in Paris and Amsterdam. Italys infrastructure and transport minister, Maurizio Lupi, will also meet with his French counterpart on Sept. 26 to discuss the situation, he said yesterday at an event in Rome . Ill meet the French minister and Ill be clear about the fact that Alitalia is a strategic asset for our country and that finding an international partner is essential, Lupi said.
Credit: Reuters/Charles Platiau PARIS | Wed Sep 18, 2013 2:33pm BST PARIS (Reuters) – French airline Air France announced 2,800 fresh job cuts on Wednesday to help cope with weak air travel demand as it heads towards its sixth consecutive annual operating loss. The carrier said it would no longer reach its target to break even this year, but said it was “imperative” to achieve that in 2014. “We are in a period of weak demand,” Chief Executive Frederic Gagey told a news conference. “We have felt the full brunt of the cyclicality of air transport.” Air France, part of Franco-Dutch group Air France-KLM (AIRF.PA), said it would begin negotiations with staff representatives from October 4 on new voluntary departure plans to cut an expected staff surplus for next year. Air France has been hurt by the impact of Europe’s economic woes on demand for air travel, soaring fuel costs, and aggressive competition from low-cost carriers in the region and Gulf carriers on long-haul routes. The head of rival IAG (ICAG.L), parent of British Airways and Spain’s Iberia, Willie Walsh, said on Tuesday that European airlines would have to cut costs at their short-haul businesses to compete with budget airlines or struggle to stay aloft. Traditional network carriers are cutting jobs, renegotiating staff contracts and dropping uncompetitive routes. Air France is already cutting around 5,120 out of 49,300 staff on French contracts by the end of 2013 as part of plans unveiled in June last year. Air France added on Wednesday that it would further reduce capacity on French point-to-point routes out of Paris Orly airport and in its regional bases, while it would develop its Transavia European unit. The carrier also said it would retire its Boeing (BA.N) 747 freighters from its cargo fleet by 2015. It will stop flying the jumbo aircraft on passenger services in parallel. (Reporting by Matthias Blamont; Editing by Leila Abboud and Tim Hepher)
In an interview published by Liberation newspaper on Thursday, France’s minister for the digital economy, Fleur Pellerin, said Europe needed new regulatory powers to intervene much earlier, to level the playing field in the internet economy and allow the emergence of alternatives in Europe to U.S. Web giants. She said Europe needed to be able to act quickly, as soon as problems are identified, rather than getting tied up in lengthy and costly disputes that did nothing to help consumers. “The current tools of competition law are totally unsuited to the fast-changing world of the Internet,” Pellerin said in the interview conducted in French. “To get out of this impasse, Europe needs a regulatory authority to act on an ex-ante basis, as soon as conflicts and abuse emerge on the part of internet platforms.” The idea is part of a broader proposal laid out by France ahead of an October 24 European summit on the digital economy, the Internet and innovation. Other elements include revamping tax rules to ensure Web companies pay tax on the profits they make in the European Union, an EU source said, as well as stricter rules on the protection of personal data online. The Wall Street Journal, citing French briefing documents ahead of the summit, said France would ask the European Commission to draw up proposals by spring 2014 aimed at “establishing a tax regime for digital companies that ensures that the profits they make on the European market are subject to taxation and that the revenues are shared between the Member States, linking the tax base to the place where the profits are made.” The tax proposals and idea of a new regulatory body are likely to prove controversial with some member states that favor a hands-off approach to the Web, as well as the United States, home to the largest internet companies and already at the center of a debate over surveillance after revelations about the National Security Agency by former intelligence contractor Edward Snowden. An adviser to Pellerin said that France would ask the European Commission to study how “ex-ante” – or anticipatory regulation – of internet services could function and what sort of agency would be needed. Then the work of passing a regulation or a directive could be carried out by the next EU Commission, which will be in place by early 2015 after parliamentary elections. (Additional reporting by Charlie Dunmore in Brussels; Editing by Eric Walsh)
Britain announced a carbon tax in April. “If this tax is created by decreasing other levies, why not?, but if this is a way to raise taxes overall, then no,” said Pierre Gattaz, head of French business lobby Medef. Hollande added that proceeds from the new “energy-climate contribution” would be redistributed through lower taxes elsewhere. He proposed a cut in value-added tax (VAT) on home insulation work to 5 percent from 7 percent currently to increase energy efficiency. The government’s main energy ideas include efficiency programs, a push for more electric vehicles and a boost in renewable energy use. On Friday Hollande asked his industry minister to speed up construction of charging infrastructure for electric vehicles, on which French firms such as carmaker Renault and Bollore have invested billions. Hollande also stuck to his campaign promise of cutting France’s reliance on nuclear power to 50 percent from 75 percent by 2025, adding that he wanted to boost alternative energy sources. COST SAVINGS France draws 80 percent of its electricity output from its fleet of 58 nuclear reactors but relies on oil and gas imports for other energy needs such as transport. It cut oil consumption by almost 10 percent between 1990 and 2012, helped by more fuel-efficient vehicles and more use of its own electricity over imported gas. But with oil prices rising about fivefold in the meantime, energy imports have weighed more on the country’s trade balance, with its total energy bill reaching a record 68.7 billion euros in 2012. Hollande said that his plans aim to save 20 billion to 50 billion euros on France’s annual energy bill by 2030. EUROPEAN CARBON TARGET He also called on European Union partners to agree a more ambitious target to cut greenhouse gas emissions and said the 28-nation bloc should consider imposing an EU-wide carbon tax. Hollande reiterated his call for the EU to cut CO2 emissions by 40 percent by 2030 compared to 1990 levels versus the existing 20 percent goal. That proposal chimes with plans under consideration by the European Commission.