Alitalia has reported a net loss of €315m (£222m) for the six months to end-Jun03 on revenues of €2.19bn.
This compares with a net loss of €49m (£34m) and revenues of €2.39bn in the year earlier period. However, the airline still managed to turn in a full year net profit of €93m for 2002.
First half losses before interest and taxes more than doubled to €266m from €119m last time.
Alitalia blamed the decline on the general economic downturn and the adverse effects on global travel of the Iraq war and SARS outbreak.
Speaking at a press conference to announce the first half results, Alitalia chairman, Giuseppe Bonomi, said the airline was set to launch a legal battle against its budget competitors, which he claims benefit unfairly from financial aid from local governments and airport companies.
Bonomi also said that the way forward for Alitalia was through strengthening its ties with Air France, adding that he hoped this would eventually lead to a merger between the two airlines.