Is it Alitalia and Air France-KLM?

It is reported that Air France-KLM Board
approved today a bid of $425 million in
exchange for shares in CAI, the investment
group which tookover some of Alitalia's in
assets out of bankrptucy. CAI's Board
will vote its Alitalia shares at a meeting
Monday in Rome.

Click to read full story on Bloomberg.

It is reported Lufthansa the second-largest European carrier
after Air France, is in contact with Alitalia and there is “still the
possibility of making an offer.”

Alitalia was put into bankruptcy administration on Aug. 29 after
political and labor opposition ended two years of attempts to sell
the airline, which was 49.9 percent state-owned.

On Monday January 12 all Alitalia passenger operations

will fall to CAI, a group of 21 investors led by

Piaggio & C. SpA Chief Executive Officer Roberto

Colaninno and including the Benetton

family’s toll-highway operator Atlantia SpA and

Intesa Sanpaolo SpA.

More on travel to Italy after the jump.

Strike Strands Rome Air Travelers

Holiday travelers are scrambling to find flights out of Rome's Leonardo Da Vinci airport thanks to latest round of labour unrest at Italian airline Alitalia.

The baggage handlers and maintenance staff walked off the job Monday to protest negotiations with CAI, the group of investors that plans to relaunch a smaller, more efficient Alitalia next month.

The strike is now in its second day, which which has grounded about 150 flights in two days. Workers at the ground services unit at Fiumicino airport walked off their jobs on Monday to hold union talks about their futures when an Italian business consortium known as CAI relaunches the troubled carrier next year

The walkout stranded holiday travelers, many of whom were still sleeping on airport benches or standing on long lines Tuesday morning waiting for flights out.

Alitalia went bankrupt earlier this year. Its most valuable assets were bought by the business consortium CAI, a group of Italian businessman who own much if Italy's industry, which plans to merge the airline with a domestic rival AirOne.

The airline's bankruptcy commissioner posted an advertisement in newspapers, including the Financial Times, on Tuesday announcing the sale of 46 Alitalia planes and asking for expressions of interest by Jan 29.

For more about Italy visit WebVisionItaly.com, the only television network about Italy in English.

Alitalia leaves the nest: Italian Business Men New Guardians

ROME, Dec 12 (Reuters) - An Italian investor consortium buying Alitalia formally took possession of the airline's assets on Friday in another step towards closing the long-awaited deal, said Roberto Colaninno, president of the CAI investor group.

CAI's purchase of Alitalia is said to be 427 million euros ($567 million).

CAI, a group of Italian businessmen, takes control after opposition from employees and others failed....

The Anpav and Avia unions representing flight attendants agreed on Friday to join the major unions in backing the deal, though CAI had effectively ignored their protests so far and begun individually hiring pilots and flight staff.

CAI on Thursday said it had also finalised the purchase of smaller airline Air One, whose operations will be folded into those of Alitalia as part of the bid to relaunch it. ($1=.7537 euros) (Editing by Greg Mahlich)

CAI purche of Alitalia for $600 million is far less than the $1.5 billion reported in press. Maybe the CAI group assumed $1 billion in debt.

Either way, nice that Alitalia will be restructured and readied to compete against the world class Gulf State airlines funded by sovereign wealth funds.