Alitalia’s board may indicate tomorrow to the government its preferred alliance partner, reported the daily La Repubblica. The newspaper added that the troubled airline, which is owned at 49.9 pct by the economy ministry and has to launch a capital increase to cover past losses, could propose to the government to pass on its rights in the recapitalisation to enable the chosen partner to acquire a stake.

The move would enable the government to dilute its stake to 10-15 pct and privatise the company, it said.

The operation would favour Air France-KLM, which has a commercial agreement with Alitalia, or Deutsche Lufthansa AG, the daily said.

The board is also due to examine a new business plan for Alitalia which could result in a cut in the less profitable routes and an increase in flights from secondary Italian airports to European destinations, the newspaper said.

Separately, the daily Il Sole 24 Ore said that the government has not yet decided between holding private talks and a public tender bid to sell down its stake in Alitalia.

However, it seems likely that it will choose a public tender but reduce the conditions imposed on the potential buyer, the paper said, following the failure of a previous tender when all bidders pulled out.
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