Fog clouding the future of Alitalia deepened on Thursday when Air France-KLM wrote off the value of its stake and told Italy it would ignore an emergency cash call for the battered airline unless "very strict conditions" were met.
Chief Executive Alexandre de Juniac said he had been "offended and discouraged" by the conduct of talks to keep Alitalia afloat and stood firm after a weak economy forced the Franco-Dutch group to put back its own debt reduction plans.
"We are not here to put money into a company that cannot last for the long term. We need a real, robust plan that will stay the course," the former French finance ministry official told reporters after announcing higher third-quarter profits.
Alitalia declined comment, but said in an emailed statement that its flights continued without disruption. Hurt by competition from low-cost carriers and high-speed railways, Alitalia has asked shareholders to take part in a 300-million-euro capital increase to help ensure its survival.
Air France-KLM says it backs Alitalia's financing move in principle but has kept the airline guessing over whether it will participate despite mounting pressure from Italian shareholders.
If it refuses to participate in the increase, Air France-KLM will see its 25 percent stake fall automatically to 11 percent.