The Wall Street Journal-20080214-Alitalia SpA- Pretax Deficit Narrows- But Problems Remain

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Alitalia SpA: Pretax Deficit Narrows, But Problems Remain

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Alitalia SpA, which Air France-KLM is looking to buy, said its 2007 pretax loss narrowed from a year earlier, but high costs, strikes and competition from budget airlines continued to weigh on the carrier. The Rome-based airline, which the Italian government is trying to sell to the Franco-Dutch carrier, said its pretax loss totaled 364 million euros ($531 million), compared with a pretax loss of 405 million euros a year ago. The company will publish its net results in May. In 2006, the net loss was 625 million euros, including a 197 million euros write-down of Alitalia's fleet. The company said that net debt stood at 1.17 billion euros at the end of December, up approximately 18% from 2006. Alitalia on Jan. 15 started a period of exclusive talks that are expected to lead to a takeover offer.