KLM to compensate Alitalia with 150 million euros

The Dutch Arbitration Courthouse sentenced fellow air carrier KLM to indemnify Italian company Alitalia with 150 million euros on the heels of the May 2000 breakup that put an end to their mutual alliance dating back to November 1999.

Sources close to Alitalia said in Rome that the arbitration courthouse overrode KLM’s unilateral decision to terminate the alliance based on allegations that the Italian airline had hocked over privatization proceedings –the State owns 53 percent of it- and over the opening of the Malpensa Airport in Milan.

The Netherlands Arbitrage Institute sentenced KLM to fork over 250 million euros in line with the contract’s compensation provision, while the Italy-based carrier is to defray its former Dutch partner the lump sum of 100 million euros it poured into the Malpensa Airport.

Alitalia’s CEO Francesco Mengozzi expressed satisfaction over the arbitral ruling and pointed out the verdict won’t put a snag in the company’s potential plans with KLM and within the framework of the Sky Team Alliance it has inked with other such carriers as Air France.

Since the Dutch airline has vowed not to appeal the ruling, the compensation payment will allow Alitalia to wrap up this merger with in-the-black numbers instead of a 50-million-euro deficit it had previously reckoned.