Berlusconi Election Victory Could Decide Alitalia's Fate

The future of Italy's flag-carrier, Alitalia, could become clearer if, as expected, Silvio Berlusconi becomes prime minister.

The government and unions at the airline, which loses €1m (£800m) of taxpayers' money a day, are deadlocked over plans to sell it to Air France/KLM and are due to resume talks on Tuesday.

But victory for the billionaire media mogul could break the impasse. He is strongly opposed to the sale, making opposition to it a centerpiece of his campaign. Once in power, he is likely to throw his weight behind an Italian solution.

In one of his last interviews before Italians went to the polls on Sunday, Berlusconi again dismissed the Franco-Dutch offer solicited by the outgoing government as "unacceptable and, indeed, offensive for our country".

Berlusconi has repeatedly insisted there is an all-Italian consortium waiting to make an improved bid for the debt-laden airline, although none of the companies and banks hinted at by Berlusconi has made a firm commitment.

The outgoing center-left government insisted that, as the only prospective buyer, Air France-KLM offered the "only concrete solution". It ruled out further funding, and Alitalia, once a symbol of the country's postwar economic miracle, has less than €170m in cash. With bookings down a reported 30%-40%, it is reckoned the airline can survive only until the end of next month without further funding.

On April 2, Jean-Cyril Spinetta, the chairman of Air France-KLM, walked out of talks with unions after they rejected his revised offer. The Franco-Dutch group had said from the outset that its bid for the airline was conditional on an endorsement by workers' representatives.

The unions, emboldened by Berlusconi's hostility to the deal, balked at a blueprint that included cutting the workforce by 10% and closing the cargo unit. In a statement last week, after a meeting with representatives of the outgoing centre-left government, they said their aim was to get a bridging loan for Alitalia "so that Air France-KLM will be forced to the table for fear of losing the deal".

Regional interests have also played a role. Berlusconi's stronghold is the north, particularly his home town of Milan. Were Spinetta's group to take over Alitalia, it would complete the downgrading of Malpensa airport in Milan in favor of Fiumicino in Rome.

On Friday, it was reported that the privately owned Italian carrier Air One might submit a proposal.