Milan: Italy was scrambling on Tuesday to find a way to keep Alitalia flying after the airline’s suitor, Air France-KLM, withdrew its offer to buy it.
Outgoing Prime Minister Romano Prodi is expected to call a cabinet meeting on Tuesday, a day after Air France-KLM said it had withdrawn its bid.
Alitalia is losing at least one million euros a day and with its cash running out, it risks having its licence to fly revoked by Italy’s civil aviation authority.
The airline has said it needs at least 750 million euros ($1.19 billion) by mid-year while analysts estimate the airline, 49.9 percent owned by the state, has weeks or a few months before running out of cash.
Months of takeover talks were beset by union opposition and threats from Silvio Berlusconi that he would seek to overturn the deal if elected prime minister, which he was last week.
Air France-KLM’s offer had been accepted by the government and Alitalia management but unions rejected it.
The challenge now is to find financing to keep Alitalia in the air.
The European Union has warned that it if the government offers aid to the airline, rival carriers could have grounds to file lawsuits.
The Corriere della Sera newspaper said Italian banks might come up with a 1 billion euro to 2 billion euro recapitalisation to give the airline a year to find a new partner.
Intesa Sanpaolo, a bank which backed a failed bid by smaller airline Air One, has said that it might be interested under the right conditions.
Berlusconi, who will become prime minister next month, opposed an outright takeover by the French-Dutch airline but in recent weeks has put forward alternatives, including seeking a consortium of Italian investors or talks with Russia’s Aeroflot .