Italy's largest airline, Alitalia may have to file for bankruptcy in a few months if government attempts to sell a controlling stake fail, Transport Minister Alessandro Bianchi said.
Bianchi belongs to a communist party in Prime Minister Romano Prodi's government which previously refused to consider the possibility of liquidating Italy's flagship carrier. His remarks indicate that, following several unsuccessful attempts to revive the airline, he now accepts bankruptcy could be the only option.
The Italian government has been struggling to sell its 49.9 percent stake in loss-making Alitalia. A tender organised by the treasury was scrapped in July after all the potential bidders gradually pulled out, saying the sale terms didn't give them enough freedom to implement a restructuring strategy.
After the auction collapsed, the government appointed a new chief executive at Alitalia, charged with finding a buyer for the ailing carrier. Last month, Alitalia said it had six potential suitors, including leading European carriers Air France-KLM and Deutsche Lufthansa.
Air One, Italy's second-biggest carrier by passenger numbers after Alitalia, is also a potential buyer. The holding company which controls Air One, said Goldman Sachs will act as adviser for a bid it is preparing with the support of Italian bank Intesa Sanpaolo.
Beset by high operating and fuel costs, stiff competition from budget airlines and persistent labour strikes, Alitalia's net loss rose to US$918 million in 2006 from $246 million a year earlier after it booked a hefty write-down to cover the depreciation in value of its ageing fleet.
Alitalia has a stock market capitalisation of $1.76 billion, the same as its net debt as of the end of September.
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