ROME - ITALIAN airline Alitalia cancelled flights on Friday and regulators said they might soon ground the troubled flag-carrier as it hurtles toward bankruptcy after the failure of another rescue plan.
Alitalia said it had cancelled 30 flights, mainly out of Milan, for what it called 'technical reasons'.
It said passengers were being put on alternative flights, but many travellers preferred to go by rail, with two extra trains being laid on between the northern metropolis and Rome.
The National Civil Aviation Authority (ENAC) will meet Alitalia management on Monday to start examining the company's viability, and could withdraw its operating licence within days, officials said.
'If there is nothing concrete on the table, in a week, or 10 days at most, the planes will no longer be able to fly,' ENAC head Vito Riggio told the Milano Finanza daily.
'Of course, we hope that will not happen.'
Alitalia insisted that ticket sales, reservations and flights were all operating normally, while the government seemed not to have given up hope of tempting the Italian Air Company (CAI) consortium back.
'There are still contacts, we are trying to revive negotiations with the CAI but the situation is desperate,' Transport Minister Altero Matteoli said late on Thursday.
If the CAI withdrawal is confirmed 'there is no other outcome but bankruptcy,' added Labour Minister Maurizio Sacconi.
Alitalia's government-appointed administrator Augusto Fantozzi, who is to meet ENAC on Monday, said, 'We will do all we can to keep Alitalia alive.'
But he admitted that other major foreign airlines he had contacted had shown no interest in taking on Alitalia.
A spokesman for Lufthansa declined to comment on a report in the daily La Repubblica that the German airline could be a 'white knight'.
Press reports said Mr Fantozzi could keep Alitalia flying for a few more weeks, including by selling off a number of subsidiaries and continuing to lay off workers.
The administrator began on Thursday to make some 4,000 employees redundant, but only 30-50 million euros of a 300 million euro emergency loan granted by the government in April are likely to remain by the end of September.
CAI, comprising top names in Italian industry, withdrew its a billion euro (S$2 billion) takeover offer on Thursday after six out of the company's nine trade unions rejected a deal which would have led to 3,250 job losses.
The consortium said it had made many concessions but any more would have put the realisation of the plan at risk, especially given the world financial turmoil.
The failure was a blow to Prime Minister Silvio Berlusconi, who had promised before elections this year that the airline would remain under Italian control.
Alitalia, founded in 1946, has suffered from continuous political interference in a country whose governments have been notoriously short-lived, preventing it from building a long-term strategy, analysts said Friday.
The government holds a 49.9 per cent stake in the airline and has spent five billion euros in the last 15 years to keep Alitalia flying through crisis after crisis.
Under the CAI proposals Alitalia would merge with Italy's second airline, Air One, employing a total of 12,500 workers. Pay levels would stay the same and employees would receive seven percent of profits, but working hours and productivity would be increased.
The plan provided for a foreign airline taking a minority stake in the new Alitalia, while offshoots, such as maintenance and freight operations, would be sold off. -- AFP
