The investment firm which owns Monarch Airlines is weighing a surprise bid for parts of Alitalia, Italy’s loss-making flag-carrier.
According to Sky news Greybull Capital, which has won plaudits for its quickfire turnaround of British Steel, is among a pack of potential buyers of Alitalia’s aviation assets.
Alitalia has been put up for sale by the Italian government after it pumped in €600m to keep the airline afloat earlier this year.
Greybull is understood to retain an appetite to invest in airlines that need restructuring, despite the difficult industry environment it has faced through its ownership of Monarch.
People close to the bidding process for Alitalia said that Greybull was keen to acquire the airline’s engineering business to integrate it with its existing operations.
Greybull is expected to seek partners for some of Alitalia’s short-haul activities given the Italian carrier’s lack of scale competing against giant rivals such as easyJet and Ryanair.
The London-based investment firm is thought to be less keen on Alitalia’s ground handling operations, which could put it at a disadvantage in a process in which bidders have been told that preference will be given to acquirers of the whole company.
Ryanair has already publicly declared its participation in the Alitalia auction, while easyJet is also reported to be involved.
The Italian airline has been run by a trio of commissioners since it fell into administration in May amid competition from low-cost rivals and its own inflated cost base.
Besides Greybull, other private equity groups are expected to participate in the process, which should be concluded well before the end of the year.
Greybull’s efforts to shore up Monarch’s finances resulted in a major deal with Boeing last year, although the backdrop for the tourism-focused airline has remained grim since then, partly because of the weakness of sterling.
The investment firm has scored a clearer initial success with its backing of British Steel, the long-products unit of Tata Steel UK it bought last year and which it has already returned to the black.
Rothschild, the investment bank, is handling the sale of Alitalia. Greybull declined to comment on Monday.
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