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Lobbying Begins Against Air France Bid for Alitalia

Air France-KLM's bid for Italy's state-controlled airline, Alitalia, has triggered a frenzy of
holiday lobbying by powerful opponents who want Rome to reject an offer they say harms national interests.

Alitalia's board of directors late on Friday chose Air France-KLM for exclusive talks. The decision must still be ratified by the ailing flag carrier's top shareholder, the Italian state.

Ahead of a promised government decision by mid-January, politicians and labor leader are telling the state to find a better buyer for Alitalia -- a source of national pride even though it loses 1 million euros ($1.44 million) a day.

"It's folly," said Roberto Formigoni, governor of Lombardy region, home to Italy's financial capital Milan.

"Air France (has) a strategic interest in cutting its most significant competitor in half," he told Italian media.

Formigoni and other politicians in Italy's wealthy north predict Alitalia will be swallowed the Franco-Dutch airline, the world's biggest by revenues.

They also predict Air France-KLM would treat Alitalia as a more of a regional airline and transfer major routes to Paris to the detriment of Milan's Malpensa airport, sending businessmen there to make tedious connections when flying abroad.

A member of the northern, separatist party Northern League threatened to block the roads leading to Malpensa in protest.

"If Rome declares our death, we will try at least to die standing," Matteo Salvini told Italian media.

No Deal Yet

The board at Alitalia said Air France-KLM was a better match for Alitalia than the only other offer it had on the table, from much smaller Italian carrier Air One.

Air France-KLM promises to sink 6.5 billion euros in long-term investments into Italy's flag airline, preserve the Alitalia brand and an extensive network of routes in Italy.

But Air One is urging the government to reconsider. It's offer would keep Alitalia in Italian hands, and still make it Europe's fourth largest carrier, officials say.

The controversy piles political pressure on Prime Minister Romano Prodi, whose spokesman reiterated the government would make its own decision -- which may or may not back the Alitalia board's recommendation.

"The government must analyze the documents and take a definitive decision. But there are those who are convinced the episode will end a certain way," Silvio Sircana told L'Unita newspaper, warning against "hasty conclusions."

One Air France-KLM skeptic inside the government, Transport Minister Alessandro Bianche, told La Repubblica newspaper he would have backed "a different offer" than Alitalia's board did. But added he had yet to properly review the Air France-KLM deal.

Milan's Mayor Letizia Moratti said she wanted an urgent meeting with Prodi, and said the government had to look beyond just Alitalia's interest to see the sale's impact on the nation.

"Eradicating the flag airline from the region where there is the most business certainly does not mean helping national development," Moratti told La Repubblica.

"I'm not defending Malpensa. I'm defending Italy."

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