British Airways' Parent IAG Wants EU to Examine 'Illegal' Alitalia Bailout
Reuters

Ryanair has launched a bid for stricken rival Alitalia, as the budget airline seeks to strengthen its market dominance in Italy even further.

The Irish carrier, which already has the lion's share of Italy's aviation market with 28%, put forward a "non-binding" offer for country's flagship airline, which formally begun bankruptcy proceedings in May.

"We are serious in indicating we have an interest in Alitalia," said Ryanair chief executive Michael O'Leary.

"But we are also serious in that our interest in Alitalia is only [...] if there was a significant restructuring so that Alitalia could reasonably be seen to operate on a profitable basis."

O'Leary, however, warned one of the conditions for Ryanair taking the process forward was "an absence of Italian government interference".

Some 18 companies originally expressed interest in Alitalia but, according to Italian media, only 10 presented non-binding offers by last Friday's deadline (23 July). The parties determined to make binding offers have until October to do so, otherwise the administrators would be forced to wind up the airline.

Italy's government has repeatedly dismissed the possibility of nationalising the airline, which was last put into bankruptcy in 2008 after labour and political opposition derailed a proposed sale.

However, Rome extended a €500m (£447.5m, $582.5m) loan in a bid to keep the airline afloat until October.

Alitalia, which is 49% owned by Etihad Airways, has rarely reported a profit in its 70-year history and reported a net loss of €199m in 2015, the latest year for which financial reports are available.

Once the dominant force in Italy's aviation market, Alitalia, which flies to 80 destinations worldwide, has seen its stature diminish at a rate of knots.

According to a study on industry data from Milan's Bicocca University, the carrier's share of the Italian market has plunged from 23% in 2007 to 18% as of 2015, as the airline bore the brunt of increased competitions from budget carriers.

News of Ryanair bid came as the Dublin-based airline posted a 55% year-on-year increase in pre-tax profits to €397m, while revenue rose 13% from the corresponding period the year before to €1.9bn.

Passenger numbers also increased, rising 12% year-on-year to 35 million, while the load factor, a gauge of the number of seats filled on each plane, increased two percentage points to 96%.