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Italy releases 400m euros for flagship airline Alitalia's lifeline
[ROME] Italy's government on Monday approved a 400 million euro (S$605.6 million) bridge loan to Alitalia to carry the airline through May as it searches for a plan to save the money-losing company.
The loan introduces "urgent measures" to assure Alitalia's operations through May 31, 2020, the council of ministers said in a statement.
The government had provided a 900 million euro lifeline to Alitalia in 2017, but the flagship airline continues to burn through cash.
Alitalia, which has been under special administration since 2017, is at a standstill after a consortium of potential buyers failed to make an offer last week before the latest deadline expired.
The European Commission has opened a probe into whether the 2017 loan amounted to state aid, which the EU regulates in order to prohibit unfair competition.
Alitalia has been losing money for years, its business squeezed by competition from low-cost carriers, fuel price rises and luxury airlines from the Middle East.
As Alitalia continues to falter without a clear plan in sight, unions have called a Dec 13 strike as they fear a restructuring with job cuts or bankruptcy.
Last week, Economy Minister Stefano Patuanelli said no "business solution" was in sight to save the company, after Atlantia - which operates Rome's airports - pulled out of a potential partnership with state railway Ferrovie dello Stato (FS), US airline Delta and the Italian treasury.
Mr Patuanelli did not rule out the possibility of the company being nationalised.