By Deepa Babington

ROME (Reuters) - Near-bankrupt Italian airline Alitalia (AZPIa.MI: Quote, Profile, Research) posted a wider quarterly loss on Tuesday and warned it could not sustain the damage from higher oil prices and uncertainty over its fate much longer.

The airline, which the Italian government has unsuccessfully tried to sell for more than a year, said it urgently needed a capital increase despite receiving an emergency government loan last month.

Alitalia reported an operating loss of 161 million euros in the first quarter, compared with a loss of 113 million euros in the year-earlier quarter, citing the hit from higher oil prices and lower traffic on its network.

It also acknowledged that the uncertainty over its future after the collapse of its sale to Air France-KLM had hurt its credibility and damaged ticket sales.

It reported a pretax loss of 215 million euros, also wider than the 152 million euro loss in the year-earlier period. Operating revenues edged down slightly to 1.057 billion euros from 1.60 billion euros over the same period.

Alitalia has long struggled under tough competition from low-cost carriers, frequent strikes by tough labour unions, bloated costs and rampant inefficiencies.

The airline is clinging on for survival after the collapse of its planned sale, thanks to a 300 million euro loan patched together by the outgoing Italian government.

Brussels suspects that the state aid may be illegal, but the European Commission has agreed to give Italy's new government until May 30 to provide more information about the loan.