Italy's government has given Alitalia permission to conduct "exclusive" buyout talks with French-Dutch carrier Air France-KLM, Italian Economy Minister, Tommaso Padoa-Schioppa, said Friday, according to dpa. Speaking at a news conference following a cabinet meeting in Rome, Padoa-Schioppa - whose ministry manages the state's controlling stake in Alitalia - said he had personally pressed for talks with Air France-KLM. "Today we only gave the go-ahead for negotiations with Air France (KLM). A formal deliberation, probably through the cabinet, will be made once those negotiations which now enter a crucial phase will be concluded," Padoa-Schioppa said. The centre-left government's decision comes a week after Alitalia's governing board said it favoured an offer by French-Dutch carrier Air France-KLM for the Italian state9s controlling stake in the ailing company. A statement issued following a seven-hour board meeting said it had been unanimously decided that "the non-binding purchase offer from Air France-KLM for the business in its currently critical condition represents the most suitable solution for a quick and sustainable redevelopment" of Alitalia. A non-binding offer was also made by AirOne, Italy's second- largest carrier. The Italian government had previously said it would await the recommendation of the Alitalia board before making a decision by mid- January. The state is seeking to sell at least 39.9 per cent of the company, from its total 49.9 per cent stake. The Air France-KLM offer involves a minimum investment of 750 million euros (1.1 billion dollars) to improve the Italian carrier's image. The majority of the investment would be used to buy new planes, renovate the interior of older aircraft and improve Alitalia's service, Air France-KLM said earlier this week. Italy's national carrier has been in financial distress for years. In the third quarter, the company suffered a loss of 58 million euros (83.7 million dollars) before taxes. Successive Italian governments have shown little enthusiasm for relinquishing state control of the company - a moved deemed necessary by most experts to restore Alitalia's financial viability.
