April 29, 2019 / 5:15 PM / a month ago

Italy state railway considers Alitalia rescue plan delay

MILAN (Reuters) - Italy’s state railway Feorrovie dello Stato (FS) said on Monday its board had met and looked at a possible delay to a deadline to submit a rescue plan for ailing carrier Alitalia.

FILE PHOTO: An Alitalia airplane pictured at Leonardo da Vinci-Fiumicino Airport in Rome, Italy, March 30, 2019. REUTERS/Alberto Lingria/File Photo

The airline has been under special administration since 2017 when workers rejected the latest in a long line of rescue plans. Rome is desperate to orchestrate a rescue to avoid mass layoffs.

FS, which has been spearheading the Alitalia rescue efforts, has until Tuesday to find investors ready to inject fresh funds and revamp the airline.

The railway group has been hoping to create a transport consortium to offer consumers a one-stop shop for travel inside and outside Italy.

Both FS and U.S. carrier Delta Air Lines are ready to contribute to a new rescue bid worth around 1 billion euros ($1.12 billion), but there is still a shortfall of around 400 million euros.

Asked whether FS had already presented a request for a postponement to Tuesday’s deadline, the company declined any further comment. Alitalia also declined to comment, while Italy’s government had no immediate comment.

FS had already asked for a two-month extension to an initial end-March deadline earlier this year but was only granted a one-month postponement after special commissioners running the carrier said it was in danger of falling into liquidation if no rescue package was forthcoming.

One government source familiar with the matter said FS wanted two more weeks to complete its offer but said the commissioners were against the idea.

On Sunday, financial daily Il Sole 24 Ore cited sources saying that while the commissioners were against any further delay they could allow 7-10 days leeway to work out details.

Once FS submits a request for a further delay, the commissioners and Italy’s industry ministry will need to take a decision on the matter.

British budget airline easyJet withdrew from Alitalia rescue talks last month, while state-controlled Poste Italiane and defence group Leonardo said they were not interested.

Sources have said that transport group Atlantia might seek to join the rescue consortium to try win favour with Rome and secure the future of its own domestic business following a deadly bridge collapse last year, but so far there has been no official proposal.

Reporting by Agnieszka Flak, Stephen Jewkes in MILAN, Angelo Amante and Giuseppe Fonte in Rome; Editing by Catherine Evans

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