Source AP ©

Aeroflot won't compete for Italy's Alitalia

Interfax news agency reported Monday that Russian JSC Aeroflot had puled of competition for debt-laden Italian carrier Alitalia SpA because of tender’s conditions.

"The Italian government doesn't want to develop its national carrier, it just wants to receive as much money as possible," the agency quoted a source as saying. The report said Aeroflot would make an official decision to withdraw at a board meeting on Saturday.

Aeroflot Deputy General Director Lev Koshlyakov did not confirm the report. "So far we have not changed our decision," he told The Associated Press.

Analysts said they had expected that the Russian company would not pursue its bid for the 49.9 percent stake in Alitalia to the end, saying the deal was looking increasingly expensive. Some Italian media had also reported that Aeroflot would pull out.

Under the terms of the competition, the buyer would have to shoulder Alitalia's debts, which clocked in at over EUR1 billion in December. That could put a heavy burden on the Russian company, which announced billion-dollar deals with Airbus and Boeing in the past week.

If confirmed, Aeroflot's decision would open the way for AP Holding SpA, the parent company of Italy's second largest carrier, Air One, to buy the stake.