Italian courts rejected Wednesday evening an initial request from Air One company seeking the suspension of merger exclusive discussions between the Franco-Dutch airline and Alitalia. Air One intention is to appeal this decision.

On Wednesday, the third section of the Administrative Court of Lazio (Rome) has rejected, after more than three hours of deliberation, the legal action of Air One against the decision of the Italian government to enter into exclusive negotiations with the French-Dutch company.

Negotiations between Alitalia and Air France, ongoing since mid-January, can therefore continue. A firm offer redemption on the part of French-Dutch company is expected by March 14. The lawyer for Air One, assistant Clarinzi had pleaded that granted exclusive negotiations with Air France-KLM was a violation of the principles governing the sale of public property, in this case the shares of the State in the national airline Air Alitalia.

In its judgement the Administrative Court put forward "the absence of evidence indicating the irreparable nature of the damage" caused by these exclusive negotiations. The Italian state, ie the future government, has yet to take the formal decision to sell its shares in Alitalia. "We intend to do anyway appealed against the judgement to make our point: our project for Alitalia remains ready, robust" responded Wednesday Air One.

This decision will not delay the deadline for a formal bid by Air France-KLM to buy Alitalia. Air One, however, is experienced in doing legal battles against competitors. Its team of lawyers is known for such actions.

For Air One, the second company after Alitalia, the appeal against granted exclusive negotiations with Air France seems to be just an action to block, or just delay the takeover of Alitalia by its French rival.

Since the announcement of the privatisation of Alitalia in December 2006, Air One chairman Carlo Toto has been planning to merge its airline founded in 1995 with the national airline. But after months of twists and turns, including the withdrawal of Air One of the tender for the sale of Alitalia last July, the management of Alitalia and the state shareholder made the choice for Air France, and accepted that the French company cut flights from the hub of Milan-Malpensa airport to keep only the platform of Rome-Fiumicino airport. Since Carlo Toto has consistently acted to make sure that Alitalia will be "an Italian company managed entirely in Italy."

His playing on the patriotic fervour has worked only partially. Of course, Carlo Toto was actively supported by the first bank in the country, Intesa Sanpaolo, and he has managed to maintain among entrepreneurs in Northern Italy the idea of an alternative to the sale of Alitalia at the Franco-Dutch giant. But in the absence of a formal offer, Air One did get a strong support of political leaders anxious to safeguard the Malpensa airport. Last week, even the mayor of Milan, Letizia Moratti, close to Silvio Berlusconi, did not support Air One.

"I do not want to interfer in the decision process. Rome has to separate the fate of Alitalia and the fate of Malpensa. But Paris has not to decide on how the Italians have to travel", said Letizia Moratti in an interview for La Repubblica.

Rumors say that Air France may make some concessions on the presence of Alitalia (in the case of merger) from Malpensa to secure the decision by the new government headed by Silvio Berlusconi, whose supporters actively campaigning for this airport.

The vice-president of Air France-KLM, Leo Van Wijk declared in the Wall Street Journal that "if Malpensa is not significantly reduced, we see no reason to buy Alitalia" . He also indicated that an agreement for the merger of Alitalia require "several billion euros of investments, about three billion for a period of five to six years."

In the short term, Air France should recapitalize Alitalia next summer with at least 750 million euros to avoid bankruptcy.