Putin, Berlusconi Talk of New Alitalia Offer

APPresident Vladimir Putin gesturing as Italian Prime Minister-elect Silvio Berlusconi looks on at his Villa Certosa in Porto Rotondo on Sardinia. Story, Page 4.
President Vladimir Putin and Italian Prime Minister-elect Silvio Berlusconi on Friday rekindled ties by talking up a possible new bid by Aeroflot for troubled airline Alitalia and hinted that a gas deal between Gazprom and Italy's Eni involving Libya could be in the cards.

But the two men, old allies and friends, struggled to focus on business and political ties at a joint news conference that was overshadowed by Putin's denial of a tabloid allegation about his private life.

Putin was visiting Berlusconi on the island of Sardinia just days after the Italian media mogul's victory in parliamentary elections. Putin arrived on the island late Thursday after completing a two-day trip to Libya, where he signed a raft of deals on debt, railways and energy.

The meeting took place at Berlusconi's luxury villa, where he has previously hosted Putin and his family.

Berlusconi said Italy would talk to Aeroflot about the sale of Alitalia, while Putin said Aeroflot's board was ready to reopen talks with Alitalia about a role in saving the airline, contradicting recent statements by an Aeroflot official.

"We spoke about Alitalia and the possibility of opening negotiations with Aeroflot," Berlusconi said. He added, however, that the situation was "very open" and that there were still talks going on with bidder Air France-KLM.

Putin responded: "Today, I spoke to the Aeroflot chairman. They are open to resume contacts."

Natalya Vodneva, an aviation analyst with Deutsche Bank, said Aeroflot's rekindled interest in Alitalia was unexpected. "Only a few days ago, Aeroflot officially said that it was not interested anymore in Alitalia," she said.

Vodneva said that considering the problems of the Italian carrier, which lost 3 million euros per day last month, and the cost of the bid, "to buy it would not be a very convenient deal for Aeroflot."

The Italian leading economic newspaper Il Sole 24 Ore reported Friday that close Berlusconi adviser Gianni Letta met late Thursday with his nephew Enrico Letta, undersecretary to outgoing Prime Minister Romano Prodi, to find a strategy for closing the Alitalia sale before the carrier runs out of cash.

In a last-ditch bid to save Alitalia, the Italian government put it up for sale last year. Aeroflot made a joint bid with Italian bank UniCredit but pulled out three months later.

During his election campaign, Berlusconi called Air France's bid "arrogant and unacceptable" and asked Italian investors to make a counteroffer.

On energy, Putin hinted that a Gazprom deal with Eni involving Libya could be close.

"Eni has already received access to assets on the territory of the Russian Federation, and Gazprom expects to get appropriate assets in other countries, including in Libya," Putin said during the news conference, Interfax reported.

Putin and Berlusconi said Gazprom and Eni would continue working on joint projects, which include the $10 billion South Stream pipeline aimed at supplying Europe via the Black Sea.

Putin's comments came a day after Eni chief executive Paolo Scaroni offered Gazprom a stake in the 140,000 barrels-per-day Elephant field in Libya.