March 27, 2017 / 12:20 PM / 10 months ago

Italy's 5-Star wants state to take control of struggling Alitalia airline

ROME, March 27 (Reuters) - A leading light of the anti-establishment 5-Star Movement, Italy’s most popular political party, said on Monday the Italian state should take control of loss-making airline Alitalia.

Italy’s flag carrier, which has made an annual profit only a few times in its 70-year history, is in a race against time to win union support for its latest plan to unlock financing and avoid having to ground planes.

The government is brokering last-minute talks with labour unions over proposed cuts to jobs and salaries, but has ruled out a bailout like those which saw Alitalia absorb billions in public money before it was privatised in 2008.

“The process needs to lead to the state having governance of the company again,” 5-Star deputy Luigi Di Maio told news agency AGI in an interview broadcast on the Internet.

Italy’s post office has said it will not repeat an investment that kept Alitalia aloft in 2013 before Gulf airline Etihad became its top investor with a 49 percent stake.

Di Maio, 30, who is widely tipped to be 5-Star’s candidate for prime minister, said the state should invest in Alitalia’s future but added he did not know what steps needed to be taken to put Alitalia under public control.

Alitalia could be “a springboard for our economy in emerging countries, in the United States and in Latin America”, he added.

Years of poor management have been blamed for daily haemorrhages of at least half a million euros, and Etihad’s turnaround plan has been stymied by competition from low-cost airlines and high-speed rail services.

Sources say Alitalia risks running out of cash in the coming weeks unless shareholders agree to pump in more money. (Reporting by Isla Binnie and Massimiliano Di Giorgio; Editing by Gareth Jones)

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