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Cash-strapped Italian airline Alitalia denied a media report on Friday that it may receive a state-backed loan to keep it afloat until it concludes a potential deal with Air France-KLM.
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The privatization of Alitalia will go ahead despite a government collapse and legal challenges from a rival airline and Milan's airport, Italy's economy minister was reported as saying in a Sunday newspaper.
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Air France KLM plans to revive Alitalia through a sizable capital infusion and list the combined group in Milan as well, the French carrier's CEO said during a visit to Rome to drum up local support for its bid.
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Alitalia has been exploited by politicians for too long and could not continue in its present state, Italy's economy minister told a newspaper, defending the decision to pave the way for a deal with Air France-KLM.
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The Italian government has approved exclusive talks between Alitalia and Air France-KLM, paving the way for the sale of the troubled national carrier to the world's largest airline by sales.
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Italian Prime Minister Romano Prodi said Alitalia would be sold to a group capable of folding the carrier into a global network, and promised regional protests would not sway his government's choice of buyer.
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