Alitalia, Air France to swap shares in market


A long-planned share swap between Italian flag carrier Alitalia and Air France will take place on the open market, leaving government stakes untouched, a sourceclose to the deal said today.

"The shares will be bought on the market, with caps on theprices," the source said.

A cross shareholding between the two state-controlledairlines has been on the cards since Alitalia sealed a marketingaccord with Air France in July 2001, becoming a member of itsSkyTeam alliance.

After more than a year of delays and reported disagreementsbetween Paris and Rome over the scale of the swap, France saidat the weekend that the deal would be finalised today.

Alitalia's Chief Executive Francesco Mengozzi said in recentdays that the 62-per cent state-owned airline planned to takearound two per cent of its French counterpart.

But Air France, which is about 54-per cent government-owned,has not specified how much of Alitalia it wants to buy.

The two boards were meeting simultaneously in Paris and Rometo finalise the cross shareholdings, which are expected to be nomore than three per cent.