http://online.wsj.com/article/SB122021553545186857.html?mod=3Dgooglenews_ws= j Alitalia's Appeal Grows British Airways Sees Possible Partnership; Italian Offer Is Set By STACY MEICHTRY and DANIEL MICHAELS September 1, 2008 British Airways PLC is considering a partnership with Alitalia SpA, people = familiar with the matter said, becoming the latest European carrier to jock= ey for a piece of the insolvent Italian airline as it embarks on a major re= structuring. A group of Italian investors will launch on Monday a formal offer for Alita= lia's potentially profitable assets -- including its newer planes and airpo= rts slots -- with the aim of then merging them with smaller Italian carrier= Air One SpA. The complex deal, which was brokered by the Italian government and would cr= eate a new Italian airline, is the latest in a string of rescue plans over = the past two years for Alitalia. According to the airline itself, it has be= en losing between =E2=82=AC1 million and =E2=82=AC2 million a day ($1.5 mil= lion and $2.9 million). As the rescue effort has taken shape, Italian bank Intesa Sanpaolo SpA -- a= n architect of the plan -- has lured other European carriers to take part. Franco-Dutch airline Air France-KLM SA has already said it might take a min= ority stake in the new Italian carrier. Germany's Deutsche Lufthansa AG, wh= ich already has an alliance with Air One, is also considering a partnership= with the new airline, according to a person familiar with the matter. Over the past week, British Airways has also joined the fray, people famili= ar with the matter said. The idea would be for BA to forge an industrial pa= rtnership, though it is unclear whether the U.K. airline would eventually a= lso take a stake, these people said. A spokesman for British Airways declin= ed to comment. The interest of three rivals in Alitalia, long considered the albatross of = European air travel, reflects the gathering pace of consolidation in Europe= 's fragmented airline industry. BA, Air-France and Lufthansa are all trying= to snap up second-tier airlines that are seeking investors, even consideri= ng potential partnerships with carriers they have shunned in the past. Lufthansa said Thursday it is in talks to buy a 45% stake in the parent of = Brussels Airlines for =E2=82=AC65 million. BA and Spain's Iberia Lineas Aer= eas de Espa=C3=B1a SA announced plans last month to merge. Lufthansa has said it is also interested in buying a minority stake in Aust= rian Airlines AG that the Austrian government is selling. Air France-KLM an= d BA have also expressed interest in the sale, according to people familiar= with the talks. The airlines haven't commented officially. Alitalia's sudden appeal is also the result of a new shield erected around = the airline by the Italian government. Last week Prime Minister Silvio Berl= usconi issued a decree revising Italy's bankruptcy-protection law to protec= t the group of Italian investors from Alitalia's creditors. The new law all= ows the investors -- led by Roberto Colaninno, head of motorcycle maker Pia= ggio SpA -- to swiftly buy Alitalia's potentially profitable parts, while t= he airline's aging fleet and most of its =E2=82=AC1.2 billion in debt are l= iquidated. The European Union is currently reviewing Alitalia's rescue plan to determi= ne whether Italy, by changing its bankruptcy law, is providing the carrier = with illegal state aid. Mr. Colaninno, along with Intesa and Italy's Benetton family, has created a= new company with =E2=82=AC1 billion in capital, Cia. Aerea Italiana, that = will purchase Alitalia's newer planes and slots at Rome and Milan airports = from Alitalia and merge them with Air One. "We are working under the umbrella of the new law," said Mr. Colaninno in a= n interview. A crucial step in Mr. Colaninno's plans is forging an alliance with one of = Europe's major airlines. Mr. Colaninno said the new Italian airline can't s= urvive in Europe's competitive aviation market without a larger partner pro= viding scale and logistical help. "Technically speaking it is very complica= ted to manage," Mr. Colaninno said, referring to all aspects of the airline= business. Mr. Colaninno also faces a battle in renegotiating the contracts of Alitali= a's staff with Italy's restive unions, which have used strikes to cripple p= ast efforts to sell the airline. The rescue plan calls for between 5,000 and 7,000 job cuts to Alitalia and = Air One's combined staff. The staff of both airlines numbers about 20,000. Write to Stacy Meichtry at stacy.meichtry@xxxxxxx and Daniel Michaels at da= niel.michaels@xxxxxxx =0A=0A=0A <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".