When divorce comes before marriage

Air France-KLM has thrown in the towel in its attempt to take over Italy’s strap-cashed national carrier Alitalia.

And yet again it’s for the last time – apparently.

On Monday the Franco-Dutch group released a short statement saying that as far as it was concerned the bid in its current form, was longer legally valid.

It was a response to a request from Alitalia for the legal situation to be made clear after the last round of talks in the soap opera to beat all others collapsed three weeks ago.

At the beginning of April the Franco-Dutch group walked away from the negotiating table frustrated over unions' refusals to accept proposed job losses. It had also discovered that the unions were still apparently trying to seal a deal with an Italian buyer – not that there was a sign of one able to cough up the necessary cash.

So Alitalia needs a buyer – again. And desperately.

By its own calculations it reckons it needs €750 million by June to keep its fleet of ageing, gas-guzzling aircraft in the air and its workforce of 20,000 plus busy.

Even though the Italian government might want to bail it out, European Union legislation prevents it from doing so, unless there are good commercial grounds. That would be hard for Rome to justify as Alitalia is crippled with €1.2 billion worth of debt and hasn’t actually turned an annual profit since 2002.

It’ll be up to Italy’s new government under Silvio Berlusconi, which takes over power next month, to find a solution. Berlusconi is known to be in favour of trying to put together an “Italian option” involving some of the country’s banks with perhaps the Russian airline, Aeroflot, holding a minority stake.

But even by his showman-like standards it would take a very large rabbit pulled from an enormous hat to really save the day. And Alitalia has been there just a little too often before.

The Italian government has been looking around for a potential buyer for its 49.9 per cent stake in the company for more than a year.

The Air France-KLM offer was generally considered to be the only viable one that would allow the Italian flag carrier to return to profitable growth quickly

While it might be curtains for the bid that was on the table, it doesn’t mean that Air France cannot be enticed to make a new one, and for many that’s the only hope Alitalia realistically has of surviving.

Industry experts say that the airline has weeks and at best a few months before it finally goes belly up and it's presently losing money at the rate of more than €1 million a day.