by Eric J. Lyman
ROME, March 19 (Xinhua) -- Delta Airlines emerged as the last remaining suitor for struggling Italian carrier Alitalia, though analysts said Delta's initial investment in Alitalia was too small to help the Italian carrier reverse its fortunes.
Britain-based discount carrier EasyJet had been involved in a proposed takeover deal that included Delta and Italian rail company Ferrovie dello Stato Italiane. But on Monday, EasyJet formally announced it was no longer interested in pursuing a deal. Though Ferrovie dello Stato remains part of a deal, Delta is now the only remaining airline involved.
In a statement e-mailed to journalists, Delta said it "confirms that it continues to explore ways to work with Ferrovie dello Stato and maintain [its] partnership with Alitalia."
Rescuing Alitalia remains a priority for both of the parties backing Italy's government as they head toward European Parliament elections in May.
"There are many areas where the Five-Star Movement and the League disagree, but rescuing Alitalia is one where they are on the same page," Olivieri Fiorini, a political affairs analyst, said in an interview.
But it is not clear that Delta is willing to invest enough money in Alitalia to help turn the airline around.
When the discussions included EasyJet and Ferrovie dello Stato, the three companies were expected to jointly invest at least 400 million euros (455 million U.S. dollars), and a 40-percent stake in the new company. Even that amount was considered too low to help Alitalia, most analysts said, arguing the company needed at least 1 billion euros (1.14 billion U.S. dollars) to engineer a turnaround.
On its own, reports are that Delta will invest a quarter of that amount, 100 million euros (114 million U.S. dollars) for a ten-percent stake in Alitalia. The company could double its ownership within four years, but doing so is not certain, according to media reports.
Delta's investment will have a limited impact for a company reportedly losing as much as 1.2 million euros (1.35 million U.S. dollars) a day.
"Delta is putting a chip on the table and will see how things develop," Lucio Cillis, an analyst and the author of "Everything you wanted to know about Alitalia," told Xinhua.
"On its own, Delta investing 100 million euros (114 million U.S. dollars) is not that significant," Cillissaid. "That's the cost of a new mid-range commercial jet. It would cover Alitalia's losses for only three months or so."
Cillis went on: "If Delta invests just 100 million euros (114 million U.S. dollars), then the question becomes, where will Alitalia find the other 900 million euros (1 billion U.S. dollars)?"
Ferrovie dello Stato is not expected to inject a substantial sum into Alitalia, and the Italian state has already loaned Alitalia hundreds of millions of euros. Adding more would run afoul of European Union rules limiting state aid for private companies. (1 euro = 1.14 U.S. dollars)
