Alitalia-AirFrance-KLM

January 13, 2009
JOINT PRESS RELEASE ALITALIA AND AIR FRANCE-KLMLAUNCH A NEW STRATEGIC PARTNERSHIP


• AIR FRANCE-KLM TAKES 25% MINORITY STAKE • ALITALIA, THANKS TO A DEEPER PARTNERSHIP WITH AIR FRANCE-KLM, THE WORLD'S LEADING AIRLINE GROUP, WILL EXPAND ITS NETWORK AND REGAIN ITS POSITION IN INTERNATIONAL MARKETS • ALITALIA EXPECTS TO GENERATE SYNERGIES VALUED AT 720 MILLION EUROS OVER THE NEXT THREE YEARS


Rome, Roissy, Amstelveen January 12, 2009

Alitalia and Air France-KLM have reached an agreement to launch a new strategic partnership, sealed by Air France-KLM taking a minority stake in Alitalia.

A STRENGTHENED ALLIANCE

The primary objective of the partnership is to deliver the best possible service between Europe and the rest of the world to all customers of Air France, Alitalia, and KLM, thanks to a global network structured around a unique combination of hubs from Northern to Southern Europe.
Alitalia, strengthened in its domestic market through the acquisition of Air One, will play a key role in international markets thanks to the extended cooperation with Air France-KLM.
The partnership between Alitalia and Air France-KLM will be based on a multi-hub strategy, which until today focused on Paris Charles-de-Gaulle and Amsterdam Schiphol and that – following the agreement - will be strengthened by the introduction of Rome-Fiumicino and Milan-Malpensa on an equal basis.
Synergies deriving mainly from network optimization and revenue management will be achieved progressively over the next three years and should amount to an estimated 720 million euros for Alitalia.

A “Partnership Manager” responsible for implementing the partnership strategy and overseeing the generation of synergies will be appointed for a term of three years, renewable once, and will be appointed on a rotating basis by the two groups.

THE STRATEGIC PARTNERSHIP

Air France-KLM will underwrite a reserved capital increase of approximately 323 million euros, giving Air France-KLM a 25% equity interest in the new Alitalia. The Air France-KLM Group will have 3 seats out of a total 19 on Alitalia's Board of Directors and 2 seats out of a total 9 on the Executive Committee.
A lock-up period is agreed for 4 years. Prior to January 12, 2013, no Italian shareholder will be able to transfer shares outside of Alitalia shareholder group or to Air France-KLM. During the 5th year – between January 13 and October 28, 2013, the transfer of shares to third parties will be possible, but only on condition that the other shareholders have not exercised their pre-emption rights and that the transfer is approved by the Board of Directors of Alitalia. The “lock up” will cease to apply only in the case of a stock market quotation, starting as of the third year.
Roberto Colaninno, Chairman of Alitalia, and Rocco Sabelli, CEO of Alitalia stated: “We are delighted with the agreement reached between Alitalia and Air France-KLM. This is a highly innovative and ambitious alliance with important industrial implications. It has been built around Alitalia's strong potential for growth over the coming years and on the quality of the Italian shareholders' entrepreneurial project. The agreement represents an important milestone in the history of Italy's flag carrier offering three great opportunities: growth for Alitalia, increased competitiveness for Italy and an effective service for all Italian air travelers.”
Jean-Cyril Spinetta, Chairman of the Air France-KLM Board, and Pierre-Henri Gourgeon, CEO of Air France-KLM stated: “In view of the many challenges facing our sector, cooperation is more than ever a necessity and we have now made a further step towards this. We are very happy about this extended partnership with the new Alitalia. It represents a genuine growth opportunity for our two airlines and the agreement is in the interest of our shareholders, our customers and our staff.”
The implementation of the agreement is subject to approval by the Alitalia shareholders. The approval of the European competition authorities, including the European Union, could be reached prior to the end of the 1st quarter of 2009 at which time the agreement will go into effect.