The Alitalia Board of Directors met today under the chairmanship of F. Cereti and took note of the preliminary figures for traffic performance in the first six months of the year as illustrated by the CEO, F. Mengozzi, together with profit forecasts which will be confirmed during the next six months, but which are certainly reliable from the qualitative point of view.
Against this background, it was clear that, in overall terms, the first semester 2002 was noticeably better than the budget forecast, in terms of key management and economic figures.
The first quarter had already confirmed the effectiveness of the measures undertaken in the Two-Year Plan 2002-2003 which are still being progressively implemented, making possible a recovery trend showing results that are much better than expected, in line with the more rapid growth in demand for air transport shown in that period.
In the second quarter 2002 as well, Alitalia effectively achieved the results forecast in the budget, in spite of a slowdown in growth during May and June and a sharp increase in competition on the domestic market - both of which may also affect the second half of the year.
With reference to key management data, it can be seen that, during the six-month period, Alitalia achieved an increase in passengers and cargo carried for the whole network of over 3% above the expected figure. The load factor, again over the whole network, showed an increase of about three percentage points with respect to the budget forecast.
With reference to the main economic results, the gross operating margin at June 30 should be over 100 million euros better than the first semester of 2001 (that is, before the September 11 crisis) returning to a significantly positive level (the gross operating margin at June 30, 2001, was negative by 51.4 million euros).
The before-tax result for the first semester 2002 should enable the Company to get close to a balanced account, even though with the contribution of extraordinary items (on June 30, 2001, there was an overall loss of about 260 million euros).
In the light of the above, it can confidently be said that the strategic guidelines of Alitalia’s Two-Year Plan 2002-2003 are being confirmed by the overall performance in the first six months of the year.
The Board of Directors also voted to accept the purchase offer of 152 million euros made by the Peabody Group, together with the firm “Lamaro Appalti”, for what is known as the “Progetto Immobiliare” (real estate project).

This project involves the sale of the present Company headquarters in Rome, located at Magliana, and the sale of part of the land owned by Alitalia at Fiumicino, near the airport, where Peabody and Lamaro will build the new Alitalia headquarters.

Alitalia will continue to use the Magliana complex until work is completed on the new headquarters building which Alitalia will then occupy on a long-term rental contract.
The sale of the land is conditioned by, and subject to, the alteration of its urban planning category, during the next 24 months.
The Board also took note of the state of progress of the procedure for transferring the shareholding in Eurofly. After examining the various offers from potential purchasers, the Board approved the CEO’s proposal just to allow the Volare Group a period of exclusivity in order to complete the phase of “due diligence” and to negotiate a sale and purchase contract for 80% of Eurofly’s company capital. On this subject, the Board particularly emphasised the need to pursue objectives that will ensure employment levels from the contractual point of view.
The Board then approved a partial re-organisation of the Company, linked to the incorporation of the controlled company Alitalia Team. In line with the instructions issued and on the basis of powers granted to the CEO, the Board decided to give the Secretary General the responsibility for coordinating the Business Units and their management. As part of the this reorganisation, all functions relating to flight operations and coordination will be allocated to a newly-created division called “Flight Operations & Coordination Division”.

Finally, the Board of Directors took the following steps:


*approved the CEO’s proposal to seek a solution to the litigation raised against the European Commission before the High Court of the European Union relating to the Commission’s decisions concerning the re-capitalisation of the Company, linked to the old Restructuring Plan 1996-2000, giving a mandate to the CEO to examine in depth the legal and company aspects involved and to submit a specific plan of action to the Board;
*approved the outline project for the merger by incorporation in Alitalia of the wholly-owned company Alitalia Teledata S.p.A. (previously known as Sigma S.p.A.);
*approved the appointment of the Banca IMI as advisor to Alitalia, jointly and with the support of legal advisors, in establishing the technical procedure and the optimal timing for what is known as “partecipazione azionaria incrociata” (cross-participation in shareholding).

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