Alitalia's future hung in the balance on Thursday after the collapse of its sale to Air France-KLM pushed it closer to bankruptcy and prompted crisis talks by its board and Italian ministers. The loss-making carrier, whose fate has become a top campaign issue ahead of Italy's general election in 10 days time, faces the prospect of special administration. A government loan Alitalia needs to survive cannot be granted without the Air France-KLM deal. Cabinet members including the economy minister overseeing the sale began talks to decide the government's next move, while Alitalia's board was scheduled to meet at 1100 GMT. Its chairman Maurizio Prato quit on Wednesday saying the company was cursed. Some unions and politicians remained hopeful the airline could avert bankruptcy and resume talks with Air France-KLM, which abandoned negotiations with unions on Wednesday after rejecting their demands aimed at preserving more jobs. Luigi Angeletti, general secretary of the UIL union that abandoned talks with the French carrier on Monday, said any decisions on Alitalia's fate should be left until after the vote. He said he did not think Air France-KLM, which says it still believes in the Alitalia project, had walked away for good. Others were less optimistic. “There has been political exploitation and a rigid stance by unions, the only path I see at this point is bankruptcy,” said Emma Bonino, a minister in the outgoing government that agreed to sell its 49.9 percent stake to Air France-KLM. “Alitalia in chaos”, read the headline in Italy's biggest-selling newspaper Corriere della Sera, while La Repubblica's editorial called it “Flagship Suicide”. Alitalia, which loses over 1 million euros a day, has enough funds to last until the end of June, La Repubblica calculated. The airline has said it needs a 750 million euro cash injection by mid-year to keep flying. With the European Union banning further state aid to the carrier, Italy's economy minister has said a 300 million euro bridge loan to keep it alive over the next few months could be given only if it sealed the deal with Air France-KLM. One union official said summer bookings by tour operators on Alitalia had dropped 50 percent from last year. Alitalia's international bookings have also fallen 40 percent over the past month, Ansa news agency said, citing market sources. Once a proud symbol of Italy's post-war economic boom, Alitalia has been hit by tough competition and soaring fuel prices which brought down rivals like Swissair, whose financial woes initially forced pilots to carry cash to pay for fuel. But newspapers speculated the government might seek a compromise with unions or search for a way to keep the carrier flying at least until after the elections. Media magnate and opposition leader Silvio Berlusconi has said he would prefer an Italian buyer. __
