Alitalia (AZA, Rome Fiumicino) CEO Silvano Cassano says his airline will not be renewing its partnership and other ancillary joint-venture agreements with Air France-KLM Royal Dutch Airlines when they come up for renewal in January 2017 claiming them to be no longer beneficial, either commercially or strategically, to the new Alitalia and its ambitious turnaround plan.

"They were negotiated when Alitalia was in a very different position, with the result that the agreements in their current forms favour the other party," he said. “We have indicated to Air France-KLM that we are willing to discuss more equitable arrangements that benefit all the parties involved, but thus far we have been unable to achieve this result."

The original agreements were concluded with the carrier's predecessor Alitalia CAI in 2009 and 2010, and were subsequently transferred to the new Alitalia SAI, in which Etihad Airways (EY, Abu Dhabi International) has a 49% stake, in January 2015. The accords govern passenger flights operated by the three carriers between Italy and France (and beyond), and between Italy and the Netherlands (and beyond), as well as the marketing, sales and distribution of Alitalia Cargo belly services undertaken by Air France-KLM.

The Franco-Dutch carrier was, at one point, the largest shareholder in Alitalia holding a 25% stake in Alitalia CAI. However, its shares have now dwindled to less than 1% following Etihad's multi-billion Euro buy-in last year.

With that in mind, Cassano went on to add that the current terms and conditions of the deal conflicted with the airline's new priorities which include regaining control of the inbound Italian tourism market, lost to the likes of easyJet (London Luton) and Ryanair (FR, Dublin International), and offering enhanced cargo solutions to the Italian manufacturing industry.

“They are undermining our ability to restructure our network and the airline effectively to achieve the long term sustainability of our business. The new Alitalia is in a new position. Our business needs agreements which deliver equitable value to each party."

He ended by saying that the Italian carrier would remain open to further discussions to achieve a 'mutually acceptable solution'.