CEO of Ailing Alitalia Being Replaced

ROME_The chief executive of the loss-making Italian airline, Alitalia SpA, whose job-cutting restructuring plan was bitterly opposed by unions, is being replaced, the Economy Ministry indicated Friday.

CEO Giancarlo Cimoli's name was not on the list of the new board of directors the ministry is proposing at a shareholders' meetings Feb. 22.

Berardino Libonati, chairman of Banca di Roma, is being proposed as chairman of the airline, though it was not immediately clear if he would also be named as the new CEO.

The ministry controls a 49.9 percent share of Alitalia and its proposals are generally expected to be endorsed as it focuses on finding a buyer for the airline.

Because Alitalia's CEO must also be a board member, the elimination of Cimoli from the list of proposed board members meant his days as No.1 executive were numbered. He has been CEO since 2004.

Alitalia said it had no immediate comment on the development.

Libonati has served as chairman or board member at several top companies, including Telecom Italia SpA.

The government announced in December conditions for the sale of at least 30.1 percent of the airline to a buyer with a turnaround plan.

Alitalia's board had to be replaced after the resignation last month of two members, including Air France-KLM CEO Jean Cyril Spinetta.

Italian financial daily Il Sole 24 Ore reported Friday that the two largest parties in Premier Romano Prodi's center-left government had clamored for Cimoli to be replaced.

The airline said last month it expects operating losses of about $380 million (US$490 million) for 2006. It has blamed strong competition from low-cost airlines, higher fuel costs and strikes by employees that grounded flights.

The 11 private investors that have expressed an interest in Alitalia include U.S. private equity fund Texas Pacific Group; AP Holding SpA, led by Carlo Toto, the chairman of rival carrier Air One; Italian banking group UniCredit SpA; and Carlo De Benedetti's private equity fund Management & Capitali.


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