Ailing Italian airline Alitalia has put off picking a buyer until next Tuesday, casting more uncertainty over the long-delayed sale process, after the government failed to make up its mind overnight.
The government, which owns 49.9 percent of the airline, is torn between picking small domestic operator Air One - the politically expedient choice that keeps it in Italian hands - and larger carrier Air France-KLM , which would take the money-losing carrier off Italian hands for good.
Alitalia also said a group comprising Singapore Airlines and two funds - Evergreen and THL - had expressed interest, but the Asian airline denied it had bid or planned to bid for the Italian carrier.
A meeting by the government to pick a preferred buyer ended with no decision late on Wednesday.
The government, which has been hawking its controlling stake for a year and watched an initial auction fail, will now seek more details on the offers.
Prime Minister Romano Prodi said there was no legal deadline for Alitalia to pick a partner and the cabinet would review the situation at a future meeting, but not necessarily the next one.
Alitalia, which loses more than 1 million euros a day, said its board would meet on December 18 to make a definitive decision. It is expected to rubber stamp the government's choice.
Alitalia has already delayed decisions on bidders and bid deadlines before and is pushing increasingly close to the government's deadline to find a buyer by Christmas.
Despite its history of losses, frequent strikes and bloated staffing, Alitalia is attractive for its domination of the lucrative Milan to Rome route and large share of the Italian travel market.
Air One, run by Italian businessman Carlo Toto and backed by the country's biggest retail bank Intesa Sanpaolo, is the bidder favoured by Alitalia's unions, regional politicians and business leaders.
It is also said to have the backing of Italy's transport minister and the two deputy prime ministers.
But analysts say Air France-KLM, the world's largest airline group by revenue, has the strategic savvy and financial clout to pursue long-term restructuring at Alitalia.
Italian Prime Minister Romano Prodi and his economy minister are said to favour the French option, but fear it could set off a backlash from Alitalia's strike-prone unions.
A third offer for the airline from a little-known group advised by an Italian lawyer was ruled out last month for lack of funds.
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