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Air France KLM favourite to buy Alitalia

Airlines and financial consortia are bidding to buy ailing Italian airline Alitalia, with Air France KLM the early favourite.

Italian national airline Alitalia is said to be losing up to 2 million euros a day thanks to higher operating costs, a series of strikes, and competition from low-cost airlines. German airline Lufthansa has already decided not to bid for the majority 49.9% stake in Alitalia now held by the Italian government because of the "financial risk".

Air France KLM wants to start flights from Rome-Fiumicino airport to a wide range of European and international destinations. It would also offer medium and long haul flights from Milan, with more early morning departures and evening return flights.

"This major step in European consolidation would not only be beneficial for passengers but would also meet the requirements for the group's economic and financial stability," says Air France KLM chairman, Jean-Cyril Spinetta.

"Together Alitalia, Air France and KLM would be able to offer their passengers an unprecedented choice of flight schedules and destinations in Europe and the rest of the world," adds Spinetta.

Another Italian airline, Air One, is also interested in buying Alitalia, and other interested parties are thought to include Aeroflot and the private equity firm Texas Pacific.

Italian president Romano Prodi said earlier this week: "The point is to have an industrial plan that can turn around and strengthen the company".

A decision on the winning bidder is expected to be made before the end of the year.

Written by: Nick Purdom