Air France-KLM moved a step closer today to controlling the near-bankrupt Alitalia after the Italian government said it could begin exclusive takeover talks.
Finance Minister Tommaso Padoa-Schioppa made the announcement a week after Alitalia's board said it had advised the government to back the Air France offer.
The world's largest airline by revenues seeks to rescue the Italian flag carrier with a long-term investment of €6.5 billion.
Alitalia's board said it preferred the Air France plan to an alternative offer by the Italian company Air One.
Mr Padoa-Schioppa said after a cabinet meeting today: 'I expressed a favourable opinion on the launching of exclusive negotiations between Alitalia and Air France-KLM.'
These talks should last about eight weeks, he said, after which Air France must submit a binding offer which will be examined by the cabinet.
Padoa-Schioppa added that the 'formal deliberation of the government...will be taken when we know the conclusion of the negotiations.'
The government, which owns a 49.9% stake in the ailing airline, failed to sell Alitalia by auction last July.
Alitalia is beset by high operating costs and fierce competition from low-cost rivals.
