While the Italian government still hopes to get improved offers for its 49.9 percent stake in Alitalia , the board of the loss-making carrier looks set to back the Air France-KLM bid when it meets today.
Alitalia's board will propose the government start exclusive talks with the French carrier, putting pressure on Rome to exclude smaller domestic rival Air One.
But the last word will rest with the government, which has already deferred a final decision until mid-January, underlining divisions within the ruling centre-left coalition.
Transport Minister Alessandro Bianchi and Deputy Prime Minister Francesco Rutelli have signalled they prefer an Italian solution amid unions' concern that Air France could be tougher on job cuts in the longer term and may downplay secondary domestic routes.
The Alitalia board has already twice postponed a choice between the two suitors.
Alitalia chairman Maurizio Prato, appointed in the summer to manage the sale of the carrier, said earlier this month that Air France's offer looked clearer and expressed doubts about the Air One plan.
It is said that if the board takes a decision on Friday, it will be 100 percent in favour of Air France. It will then be up to the government to make its assessment.
The government would wait for Alitalia's board to name its preferred partner before deciding.
Alitalia, up for sale for a year, dominates the lucrative business route between Italy's financial capital Milan and Rome, but is on the brink of bankruptcy.
Air France-KLM has bid US$0.512 per share for Alitalia, offered to buy all of the airline's convertible bonds and said it would cut up to 1,700 jobs.
Air One, smaller than Alitalia but backed by Italy's leading retail bank Intesa Sanpaolo , has offered 1 euro cent per share, investments of 5.3 billion euros and plans 3,700 job cuts.
Air France-KLM's offer would take the carrier off the government's hands permanently, while Air One would keep the Italian flagship role of Alitalia. It already has the backing of combative unions and regional politicians worried that Italy's north would lose its Malpensa hub with Air France-KLM.
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