Top Stories
Top Stories

UPDATE 1-Italy govt: we won't bargain with Atlantia to save Alitalia

(Recasts to add source, details)

MILAN, May 3 (Reuters) - Italy's transport minister has poured cold water on speculation that the government would be prepared to mend relations with infrastructure group Atlantia in exchange for the company's help in rescuing loss-making airline Alitalia.

Atlantia, controlled by the Benetton family, faces the loss of its entire national motorway concession in a bitter dispute with the government, which erupted last year when a bridge on its toll network collapsed, killing 43 people.

The government blamed Atlantia for the tragedy, accusing it of poor maintenance and vowing to revoke the concession. Atlantia strongly denies the accusation.

Speaking to Radio24 on Friday, Transport Minister Danilo Toninelli appeared to dismiss media reports that Rome would soften its stance on Atlantia in return for the group's investment in the national flag carrier.

"When you mix up issues you could be blackmailed ... the Alitalia deal is being handled by the administrators (of Alitalia)," Toninelli said.

"There is a number of important discussions which are taking place and Atlantia is among them."

Toninelli is among the government's most strident critics of Atlantia, though other members of the two-party ruling coalition are more open to a deal.

The government is arranging an Alitalia rescue to avoid mass layoffs and has lined up state railway group Ferrovie dello Stato and U.S. carrier Delta as potential investors. But it still needs another investor to stump up 400 million euros.

Flagship carrier Alitalia has been run by administrators since 2017 after workers rejected a previous rescue plan.

Atlantia has played down its interest in Alitalia, leaving German carrier Lufthansa as the only major investor apart from Ferrovie and Delta to have expressed interest.

However, Lufthansa has said it would only invest if the government were first to carry out major job cuts. (Reporting by Valentina Za and Francesca Landini Editing by Mark Bendeich)