Italian national airline Alitalia reported losses for 2006 and the first quarter of this year of 626million euros, 458 million more than previously indicated.

Three remaining bidders for the airline got their first glance at the carrier's books Thursday and found it is deeper in the red than previously thought, Italian media reports.

Because the losses are more than one third of the company's stock capital, shareholders will be obliged to launch a capital increase, the reports said.

The Italian Treasury Ministry last week invited formal bids from Aeroflot Russian Airlines, together with Italy's biggest bank UniCredit, the private equity funds Matlin Patterson and Texas Pacific Group (TGP), and AP Holdings led by Carlo Toto, chairman of Italy's second-biggest airline AirOne.

The Italian state holds a 49.9-percent stake in Alitalia and initially the Treasury said it would retain no more than 10 percent of the carrier. However, this week Economy Minister Tommaso Padoa-Schioppa told parliament that under the right conditions the state would sell its full interest.

The bidders must present their offers by July 2 and a final decision is expected by the end of July or at before parliament's summer break at the latest.