By Jo Winterbottom

MILAN (Reuters) - Airline industry association IATA is in talks with Alitalia about possible guarantees to keep using its settlements system if the Italian flagship were to go into administration, an IATA spokesman told Reuters on Monday.

"We have informed Alitalia of the process we would follow should they go into administration," Anthony Concil said. "We would either suspend them from settlement systems or require a security guarantee," he added.

Concil said later the level of the guarantee was not yet under negotiation.

If Alitalia were suspended from IATA's settlements system, it would have to make bilateral agreements with other airlines and travel agents over issues such as ticket sales.

State-owned Alitalia's takeover by world leader Air France-KLM (AIRF.PA: Quote, Profile, Research) hangs in the balance after unions refused to sign up for the deal, which included job cuts of around 10 percent of the work force.

And the situation was made more uncertain on Monday after opposition leader Silvio Berlusconi won the country's parliamentary election -- ousting the administration that had agreed to the sale.

Berlusconi, who has said he would favor an Italian buyer, said after early results pointed he had won a clear-cut victory in the poll, that he would quickly deal with the Alitalia problem.

Alitalia has said it has funds to last it "in the short term" but loses over 1 million euros a day -- a figure likely to have increased given current high fuel prices.