Page last updated at 12:09 GMT, Friday, 19 September 2008 13:09 UK

Alitalia airline cancels flights

Alitalia planes
Alitalia's future is increasingly bleak

Alitalia has cancelled a number of flights from Rome's Fiumicino airport, increasing fears that the carrier may soon go into liquidation.

The airline confirmed that a number of flights have been cancelled, but denied it had run out of aviation fuel.

On Thursday, a consortium withdrew a rescue offer for Alitalia due to opposition from trade unions.

Alitalia, which filed for bankruptcy protection last month, has warned it is low on cash to buy more fuel.

We need to return to the negotiating table because there is no-one else in the race
Labour Minister Maurizio Sacconi

Reports say between 20 and 30 Alitalia flights have been cancelled.

Alitalia told the AFP news agency that the move was caused by "technical reasons".

'No alternative'

The CAI consortium's takeover offer was backed by three of Alitalia's nine unions, but six opposed the plans, due to plans to cut 3,000 jobs.

The Italian government insists that the CAI deal is the only way for Alitalia to avoid liquidation.

"There is no alternative to CAI," said Labour Minister Maurizio Sacconi.

"We need to return to the negotiating table because there is no-one else in the race."

There is little the government can now do, as state aid for airlines is illegal under European Union rules.

There were also reports on Friday that Italy's civil aviation authority may ground all Alitalia planes within 10 days from Monday unless the airline can show a new rescue plan.

Government stake

Under the CAI rescue proposal, the Italian consortium had put forward a 1bn euro ($1.4bn; 790m) offer for the airline.

It wanted Alitalia to merge with Air One, the country's second-largest airline, while its 1.2bn euro debt would be absorbed by a second firm, which would then be liquidated.

Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia, in which the Italian government holds a 49.9% stake.

In April, plans for the airline to be taken over by Air France-KLM collapsed when unions refused to accept the terms of the deal.

Alitalia shares were suspended in June and the airline is being run by a special administrator following its move into bankruptcy protection last month.

Consortium withdraws Alitalia bid
19 Sep 08 |  Business
Progress in move to save Alitalia
15 Sep 08 |  Business
Alitalia 'running out of fuel'
13 Sep 08 |  Europe
Alitalia rescue deadline extended
12 Sep 08 |  Business

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