Alitalia could lose licence in days

Rome: Aviation authorities may withdraw Alitalia's licence in 3-4 days if the administrator making a last-ditch attempt to sell it off does not present emergency cost-cutting measures.

After the withdrawal of an Italian rescue bid because of opposition by pilots and cabin crew, the government-appointed administrator made a last bid to attract offers for Alitalia, although previous attempts to find a foreign buyer have failed.

Flights continued as usual but the state-controlled airline faces being grounded, and its assets liquidated, if there is no last-minute decision by dissident unions to accept the job cuts and slimmed-down contracts that the CAI consortium had offered.

"Alitalia is flying with a provisional licence," the head of aviation body ENAC, Vito Riggio, said ahead of talks with the airline's special administrator.

"If the [cost-cutting] fin-ancial plan doesn't arrive in 3-4 days the licence will be suspended," Riggio said.

Suffering from the high fuel prices and an economic downturn that have hit the airline sector globally, Alitalia has been on the brink of collapse for years as political interference and labour unrest bled it of cash and caused it to pile up debt.

Prime Minister Silvio Berlusconi, who made an election vow to rescue the airline, acknowledged this weekend that no foreign airline would step in and Alitalia may be doomed to bankruptcy.

Administrator Augusto Fantozzi invited offers of interest in all or part of Alitalia by September 30.

"The only significant offer... was withdrawn," Fantozzi said in the statement. "Therefore, the special administrator intends to verify the existence of other interested parties."

Fantozzi told a newspaper on Sunday that the tender would just "formalise what I have been doing - without any results so far despite all my efforts - regarding the main assets".

The only interest has been in Alitalia's heavy maintenance, cargo, handling and catering units and call centre. Fantozzi has contacted Air France, Lufthansa and British Airways, but said: "Nobody has stepped forward."

A tender for the state's 49.9 per cent stake by the previous centre-left government attracted 11 bidders who all pulled out.

Desperate attempts

A second attempt led to Air France-KLM being picked as buyer but the deal fell down on opposition by unions and Berlusconi, who was campaigning for office and said Alitalia must stay Italian.

The media mogul returned to power in May promising to rescue it and used his influence to rally 16 investors in the CAI consortium.

But CAI withdrew its offer last Thursday and has said it will not modify its offer to make it more acceptable to unions.

The government rules out further state aid or, as some leftists propose, the renationalisation of Alitalia.