By Alistair Smout and Francesca Landini
LONDON/ROME (Reuters) - British budget airline easyJet pulled out of talks to rescue Alitalia on Monday, leaving the Italian carrier's future uncertain only two weeks before a deadline to save it.
EasyJet said it had decided to withdraw from the process after talks with Italy's state-controlled railway Ferrovie dello Stato and U.S. airline Delta Air Lines.
Without an industrial partner, Alitalia could soon find itself in trouble since neither Ferrovie nor the state have the skills to run the carrier, a source said last week.
Alitalia was put under special administration in 2017 after workers rejected its most recent rescue plan, leaving Ferrovie racing to meet an end of March deadline set by Rome to present a rescue plan.
Should the deadline be missed, it would jeopardise the repayment of a 900 million euro (756 million pounds) state loan to Alitalia, which must take place by the end of June.
Although the parties had not seen eye to eye on the structure of a deal, prompting easyJet to withdraw from talks, Delta said on Monday it was still in talks with Ferrovie over the proposed 900 million euro rescue plan.
"Discussions remain ongoing as Alitalia is a long-standing partner of Delta," the U.S. airline said, while Alitalia and Ferrovie were not immediately available for comment.
Italy's populist government, which has made the re-launch of Alitalia one of its priorities, is sponsoring a plan that would see Ferrovie inject fresh funds and revamp the carrier together with industrial partners.
Ferrovie is not willing to take a stake of more than 30 percent in Alitalia, a source with knowledge of the talks said, forcing Rome to look for additional investors, probably among them state-controlled companies.
However, potential suitors have so far been few and far between, and Delta can only imagine taking a 15 percent stake or spending around 100 million euros, another source close to the matter said last week.
EasyJet, whose shares were unaffected by its 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 said.
EasyJet said in a statement it remained committed to Italy as a key market: "We continue to invest in the three bases in Milan, Naples, (and) Venice".
(Additional reporting by Agnieszka Flak in Milan and Sangameswaran S in Bengaluru; Editing by Keith Weir, Mark Potter and Alexander Smith)