Italy Says New Alitalia Bidders Won’t Be Accepted

The Italian government said it would not permit any new bidders in Alitalia’s auction, in a setback to hopes that a mystery suitor with deeper pockets might yet emerge to salvage the unprofitable airline.

Rome had set an April 2 deadline for new participants wishing to join existing bidders, but that failed to stop speculation that rival airlines such as Air France or Lufthansa may yet join those in the fray.

The statement also comes a day after Tuscan bank Banca Monte dei Paschi di Siena said it could team up with one of the bidders, Italian airline Air One, though only as a financial partner.

Interested groups can still buy minority stakes in the three final bidders –Russia’s Aeroflot, U.S. private equity consortium led by Texas Pacific Group, and Air One, which is backed by Italian bank Intesa Sanpaolo.

The Italian government, which owns a 49.9 percent stake in Alitalia, is looking to sell at least 39.9 percent of the airline in an effort to turn it around. Rome has said any buyer must maintain the “Italian-ness” of the airline and set out a list of other restrictions in controlling the airline.

Any potential buyer will also have to tackle the airline’s lengthy list of woes including its strike-prone unions, overstaffed workforce and frequent government meddling. That has scared off European rivals such as Lufthansa and Air France.

Italian media had speculated that Air France might join Aeroflot’s bid or that Lufthansa might emerge as the mystery suitor behind Air One’s bid.