Alitalia's options dwindle with no rescue bid, state aid on offer

Alitalia moved closer to collapse Thursday when major shareholder Intesa Sanpaolo said it had no plans to save the airline, foreign rivals denied being interested in a possible bid and the government ruled out a rescue for its problem child. Alitalia workers on Monday rejected a restructuring plan that envisaged cuts to jobs and salaries, making it impossible for the airline to secure funds to keep its aircraft flying. This has put pressure on the government to find a way to save the historic flag carrier and its 12,500 staff, with sources close to the situation saying Alitalia's cash is set to run out within 2-3 weeks. The loss-making airline is now preparing to go into special administration, whereby Rome will appoint a commissioner who will assess whether it can be overhauled - either as a standalone company or through a partial or total sale - or whether it should be wound up. Rome is seeking EU approval to give Alitalia a bridge loan of up to E400m to keep it afloat while a buyer is sought, but Economy Minister Pier Carlo Padoan ruled out taking part in a recapitalisation. "The government is not willing to participate directly or indirectly in any capital increase," Padoan told parliament. Despite having rarely turned an annual profit in its 70-year history, Alitalia's survival is considered a matter of national pride and with elections looming next year analysts say the centre-left government can ill afford to let it fail.<br/>