Page last updated at 20:25 GMT, Tuesday, 8 April 2008 21:25 UK

'Short term' survival at Alitalia

Alitalia sign
Alitalia could be forced into emergency administration

Italian airline Alitalia says it has enough funds to stay in business "in the very short term" while its takeover by Air France-KLM is on hold.

Alitalia said it had 170m euros of funds from 31 March to keep afloat.

Its board had been meeting on Tuesday to decide whether to seek protection from its creditors.

A takeover by Air France-KLM broke down last week when Alitalia's unions could not reach agreement on the deal, which would involve hundreds of job cuts.

But a statement from Air-France-KLM on Monday, asking the unions to reconsider their opposition to its plans, left open the possibility of future talks.

The unions have said they are willing to re-open talks, but Italy's economics minister warned that they will need to make significant concessions.

Elections due

Sources quoted by the Reuters agency have said that Alitalia has cancelled a meeting it was planning to hold with unions on Wednesday.

The government had previously warned that the only alternative to the Air France-KLM offer would be taking the airline into emergency administration.

But the government could be about to change, with parliamentary elections due to begin on 13 April.

Silvio Berlusconi, who is currently leading in opinion polls, has said he would veto a deal with Air France-KLM and has called for Italian businessmen to come up with an alternative.


SEE ALSO
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03 Apr 08 |  Business
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Union threatens Alitalia takeover
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Alitalia unions offered new deal
28 Mar 08 |  Business

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