Alitalia may lose operating licence, administrator warns

ALITALIA WILL lose its operating licence if a special administrator making a last-ditch attempt to sell the airline does not give Italy's aviation authority a credible new offer or cost-cutting plan by Thursday.

Following the withdrawal of an Italian rescue bid because of opposition by pilots and cabin crew, the government-appointed administrator made a last attempt yesterday to attract offers, although previous bids to find a foreign buyer have failed.

Prime minister Silvio Berlusconi's spokesman Paolo Bonaiuti acknowledged that "buyers are not queuing up for Alitalia".

Pilots and crew attempted to attract alternatives to the CAI consortium's rescue bid yesterday by saying they would put up their own pay and pensions, totalling €340 million, "to back any serious, credible project for the relaunch of Alitalia".

But so far, the only interest has been in the state-controlled airline's heavy maintenance and cargo units, as well as in leasing unused aircraft and laid-off staff.

Swiss investment firm Asset Management Advisers (AMA) yesterday said it was interested in buying or renting 30 Alitalia aircraft. Flights continued as usual yesterday, but Alitalia faces being grounded and its assets liquidated if there is no last-minute decision by dissenting unions to accept the job cuts and slimmed-down contracts that the CAI consortium had offered.

"Alitalia is flying with a provisional licence," the head of aviation body ENAC, Vito Riggio, told local radio before talks with special administrator Augusto Fantozzi early yesterday.

He said afterwards that Mr Fantozzi was given until Thursday to present a report on the company's prospects, any offers to buy it or a cost-cutting plan in order to keep its licence. ENAC would then have three days to evaluate the response, but Mr Fantozzi himself told reporters: "If my report does not satisfy the authority, I will seek the suspension of the licence."

Alitalia has been on the brink of collapse for years as political interference and labour unrest bled it of cash and caused it to pile up debt. Mr Berlusconi, who made an election vow to rescue the airline, said this weekend no foreign rival would step in and that the national carrier, which employs 19,000 people, may be doomed to bankruptcy. - ( Reuters)