By Henrietta Billings - 3rd May 2004
The financial crisis surrounding ailing flag carrier Alitalia deepened on Monday as the airline admitted it had lost almost €250 million in four months and has only €200m left in the coffers.
Alitalia has already posted losses of €510m for last year and Brussels is eyeing a proposed government bail-out of the company which the European Commission fears could break rigid EU competition rules.
The airline was forced to cancel 1,500 flights between April 28 and May 2 when employees walked out over a proposed restructuring plan which would cost thousands of jobs.
The industrial action is estimated to have cost the carrier, which is 62 per cent state owned, between €30-40m.
In a statement the Italian authorities said any further action would have an "extremely serious" impact on group finances.
Several airlines including Germany's Lufthansa and the UK's British Airways have complained to the commission about the restructuring plan which prompted the probe.
Reports suggest that the bail-out plan could cost Italian tax payers up to €1.2 billion.
Under European law Alitalia is no longer eligible for state aid as it has already received government grants in the past.
In 1997 the commission gave the go-ahead to a €1.42 billion aid package.
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