Page last updated at 08:31 GMT, Monday, 22 September 2008 09:31 UK

Alitalia may lose licence to fly

Alitalia planes
Alitalia has been in financial trouble for some time

Italy's civil aviation authority ENAC says it will withdraw Alitalia's operating licence this week unless it presents a cost-cutting rescue plan.

The country's debt-laiden flag-carrier is currently flying with a provisional licence, according to ENAC's president Vito Riggio.

"If the financial plan doesn't arrive in three to four days the licence will be suspended," he said.

ENAC is meeting the troubled airline's special administrator on Monday.

Flight threat

Alitalia is estimated to be losing more than 2m euros ($2.9m; 1.6m) every day, but an attempt to reach a deal with unions and Italian consortium CAI collapsed last week.

The airline's special administrator Augusto Fantozzi is poised to make an appeal for rescue bids.

"We will proceed with a public request (for offers)," Mr Fantozzi told Il Messagero over the weekend.

"It will formalise what I have been doing - without any results so far despite all my efforts - regarding the main assets."

Without a rescue, Alitalia flights could be grounded within a week to 10 days. Last week, the airline cancelled a number of flights from Rome's Fiumicino airport amid rumours it could no longer afford to buy aviation fuel.

Union resistance

Alitalia has been in financial trouble for years.

The possibility of a takeover by Italian investor group CAI collapsed last week after the offer was opposed by six unions, who were unhappy at plans to cut 3,000 jobs. Three unions had backed the offer.

Earlier this year, unions had also blocked Air France-KLM's bid to buy Alitalia.

Under European competition rules nationalisation of the airline is not permitted.

At the weekend, Silvio Berlusconi said there was little chance of finding a foreign bidder.

"The other big flag carriers aren't interested in getting Alitalia out of trouble," he said in a TV interview.

Mr Berlusconi said he still hoped that a solution could be found, but conceded that the airline could be "heading towards bankruptcy procedures".

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