Italian airline Alitalia has warned it may start cancelling flights from Monday as it is having problems buying fuel and could lose its operating licence if it fails to seal a deal with unions to avoid total collapse.
"There are difficulties relating to the supply of fuel which could put some flights at risk," Alitalia's bankruptcy commissioner, Augusto Fantozzi, said in a statement today.
Mr Fantozzi had said he would start winding up the airline from yesterday if unions did not agree to a takeover by a group of Italian investors. So far he has held off launching liquidation procedures but said Alitalia's situation was "plummeting".
Its collapse would be a political disaster for Prime Minister Silvio Berlusconi who promised voters he would use his business contacts to find an Italian buyer for the near-bankrupt airline and on Saturday blamed the opposition for the crisis.
And while Alitalia's woes are related to years of political interference, it also has suffered from soaring fuel costs and economic downturn that are pressuring the sector worldwide.
Hundreds of airline staff, who had been holding a noisy ad hoc demonstration at Rome's Fiumicino airport, fell silent as the news that planes would start to be grounded was read out by a union official.
Italy's civil aviation authority Enac said Alitalia's licence to operate was in jeopardy.
"If there is no solution very soon that guarantees the continuity of the carrier's operations, the basis on which Enac issued Alitalia with a six-month provisional licence will no longer be met," Enac said in a statement.
Mr Berlusconi expressed frustration as the rescue plan looked ever more likely to fail.
"Alitalia's destiny has been put into doubt by the unreasonable behaviour of a few of the employees and we see the strong influence of the left," he said.
Unions rejected the rescue plan by the consortium CAI which foresees thousands of job losses - the third attempt to save the heavily loss-making airline from collapse.
"At the point we are at now it is up to the government to come up with an initiative with the consortium," Guglielmo Epifani, head of Italy's biggest union confederation CGIL, told
La Repubblicadaily.
With strict European Union rules banning state aid to airlines, the government, which still holds a 49.9 per cent stake in the carrier, has limited options.
While CAI has not withdrawn its takeover offer, it said it would not make additional concessions to employees.
Pope Benedict, who travelled to France on a chartered Alitalia flight yesterday, said he was praying for the airline.