Italy To Sell Half Its Alitalia Stake

Italy plans to put half of its controlling stake in Alitalia up for sale early next year, opening the way for new owners to try to rescue the loss-making airline, officials said.

A cabinet meeting last week agreed that the state, which owns 49.9 percent of the airline, would put up for sale about a 25 percent stake.

Transport Minister Alessandro Bianchi said the sale could be completed early next year. One government source said there was no obstacle to the government eventually selling all its shares.

Alitalia, which is forecast to lose more than $266.7 million this year, has been in turmoil for more than 10 years and is on its third chief executive since 2000.

European Union market rules say that the government cannot keep bailing the airline out. The previous government diluted its majority stake in Alitalia last year through a $1.3 billion capital increase after an E.U. request.

Despite the losses and regular strike chaos, Alitalia still evokes nationalist sentiment and is seen as a strategic asset.