The Italian government will take full control of Alitalia (AZ, Rome Fiumicino), it said in a decree published late on March 16, amid concerns that the coronavirus pandemic may have forced it to abandon the sale of the loss-making carrier.

Local media reported that the emergency rescue plan could cost taxpayers up to EUR600 million euros (USD663 million) to re-nationalise the airline. Analysts have warned that the sum is too small, not least to handle the airline's 11,000 employees for a lengthy period.

The plan provides for the creation of "a new company wholly controlled by the Ministry of Economy and Finance or controlled by a company with a majority public stake, including an indirect one" to take over the airline.

The government is also working on a fund worth hundreds of millions of euros to assist the country's beleaguered aviation sector, the AGI news agency reported, the final details of which will be finalised next month.

On March 5, Rome set a deadline for expressions of interest (EOIs) to be submitted by 0000L (2300Z) on March 18 to complete the privatisation of the ailing airline by May 31. Media sources had already speculated, citing inside sources, that the realities of the coronavirus era would delay the sale.

The European Commission would typically oppose such state intervention, but given the unprecedented situation it is unlikely to complain, the reports added. As with a previous state loan of EUR900 million euro (USD1.1 billion when it was provided in 2017), the EU competition regulator said it would investigate a new EUR400 million (USD443 million) bridge loan handed out at the start of this year.

But despite the loans, Alitalia is already running out of cash, a source close to the matter told Reuters.

According to the newspaper Il Sole 24 Ore, said that only the former Avianca Holdings magnate German Efromovich, whose net worth is estimated to be USD1 billion, was interested in acquiring Alitalia as a whole. Other parties that may under normal circumstances have expressed an interest, such as Lufthansa or Delta Air Lines, have other things to worry about.