Malaysia Airlines offers to lease A330s from Alitalia

An Alitalia crew member walks past Alitalia employees who take part in a strike at Fiumicino international airport in Rome Italy

An Alitalia crew member walks past Alitalia employees who take part in a strike at Fiumicino international airport in Rome Italy

Italy's centre-left government said on Wednesday Alitalia would be sold to the "highest bidder", again ruling out a state rescue as fears mounted that the troubled airline is plummeting towards bankruptcy.

"Given the impossibility to proceed with the recapitalization, the board has made a decision to start preparing the procedures provided by the law and has convened a shareholders' meeting on April 27 to deliberate on their implementation".

It was privatised in 2008, and according to a Mediobanca study, it has cost the taxpayer 7.4 billion euros ($A11 billion) during the 1974-2014 period to keep the company afloat.

The agreement to lay off 980 full-time staff plus hundreds more contract workers and reduce flight crews wages by around eight percent had been worked out between the company and the unions - who had urged a yes vote.

The flag carrier's directors warned after a board meeting on Tuesday that they were preparing "the procedures provided by law" in response to the vote. Etihad Airways, which owns a 49 per cent stake in Alitalia, and other shareholders had made staff acceptance of the plan a precondition for their participation in a two billion euro recapitalisation plan involving a combination of loans and new shareholder financing.

Before privatization in 2009, various governments disbursed four billion euros in cash to Alitalia, rarely requiring strong industrial strategies in return.

Etihad and Italian banks Intesa Sanpaolo and UniCredit have said they would only inject new funds if the unions agree to the new collective labour agreement and cuts.

An Alitalia statement said the board will meet Thursday to discuss the move.

Asked about the possibility of Lufthansa, Europe's largest airline, taking over Alitalia, Delrio said: 'There are no obstacles (to it), but it is up to shareholders to take decisions.

Alitalia is again facing collapse after workers rejected a restructuring deal and the airline's board chose to convene a special shareholders' meeting Thursday to look at its future.

Workers and passengers of Alitalia, which continues to fly its routes as normal, are familiar with a mood of crisis.

After buying into Alitalia in 2014, Etihad pledged to return it to profit by 2017 but the turnaround faltered in the face of competition from low-priced airlines and high-speed rail services.

Italian ministers said in a joint statement Tuesday that the outcome of the ballot is "regrettable" and puts the restructuring plan for Alitalia at risk.

The carrier also plans to increase flights on higher-margin long-haul routes, but workers have remained skeptical over its plans, given a string of failed restructurings in the past.

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