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Alitalia faces uncertain future as easyJet quits talks

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Alitalia faces uncertain future as easyJet quits talks
FILE PHOTO: An EasyJet Airbus A319-100 airplane and an Alitalia Airbus A321-100 airplane are seen on the tarmac at the Leonardo da Vinci-Fiumicino Airport in Rome, Italy, June 21, 2018. REUTERS/Stefano Rellandini/File Photo   -   Copyright  Stefano Rellandini(Reuters)
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LONDON (Reuters) – The future of Alitalia was plunged further into uncertainty on Monday after British budget airline easyJet pulled out of talks to rescue the Italian carrier two weeks before a deadline to save it.

EasyJet said it had decided to withdraw from the process after discussions with Italy’s state-controlled railway Ferrovie dello Stato Italiane and U.S. airline Delta Air Lines.

Alitalia was put under special administration in 2017 after workers rejected the latest in a long line of rescue plans, leaving the government once again seeking a buyer to save the airline.

Ferrovie is racing against the clock to meet deadline of the end of the month set by the Italian government to present a rescue plan for Alitalia, and had been in talks with easyJet and Delta over a possible deal.

But the parties had not seen see eye to eye on the structure of a deal. Without an industrial partner fully on board, a source said last week that Alitalia could soon find itself in trouble since neither Ferrovie nor the state have the skills to run the carrier.

Delta said it was still in talks with Ferrovie.

“Discussions remain ongoing as Alitalia is a long-standing partner of Delta,” the U.S. airline said in a statement.

Alitalia and Ferrovie could not immediately be reached for a comment.

EasyJet, whose shares were unaffected by Monday’s announcement, had said several times it was interested in Alitalia’s short-haul operations and positions at primary airports.

A source familiar with the talks said easyJet still believed it could be a good partner for Alitalia, but that a deal was not feasible with the current approach.

“EasyJet pulled out because it wanted to control (Alitalia’s) Milan hub and use it for point-to-point flights. This could not be done,” another source with knowledge of the matter said.

EasyJet said it remained committed to Italy, as a key market for the company.

“We continue to invest in the three bases in Milan, Naples, (and) Venice,” it said in a statement.

(Reporting by Alistair Smout in London and Sangameswaran S in Bengaluru; Additional reporting by Agnieszka Flak in Milan and Giselda Vagnoni in Rome; Editing by Keith Weir and Mark Potter)

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