A day after the withdrawal of Air One, the last serious bidder for acquiring Italy's national carrier Alitalia after Russia's Aeroflot pulled out last month, the proposed auction of Alitalia, has come to an end, with the fate of the airline uncertain. (See: Alitalia's sale faces the risk of being grounded)

The beleaguered state-owned airline Alitalia, which currently loses more than €1 million every day, faces the threat of being passed on administrators after the government said the auction for its stake in the carrier had closed as another potential bidder, the US buyout firm Matlin Patterson Global Advisers, would not present a binding offer by the 23 July deadline.

Italy's commercial airline Air One withdrew from bidding for up to 49.9-per cent pf the Italian government's stake in Alitalia, of the government's stake saying, "Alitalia's "sustainable growth" would be compromised by the sale conditions."

The departure of Air One from the bidding process left US private equity group, Matlin Patterson Global Advisers, as the sole declared suitor for the purchase.

Other potential bidders including Aeroflot gave similar reasons for leaving the sale process, and also complained about not being given "critical information" relating to Alitalia's financial position. (See: Aeroflot walks out of Alitalia bidding)

Aeroflot was earlier short listed in a consortium with Unicredito Italiano SpA to bid for 39.9 per cent of the stake put up for sale by the Italian government.

Prior to Aeroflot's departure, Europe's largest airline, Lufthansa, said that it would not enter the bidding contest for Italian carrier Alitalia, saying that though Alitalia was a "good brand," not only was the price too high, the strong influence of labour unions on the ailing airline was also a deterrent factor. (See: Lufthansa steps out of the race for Alitalia)

A private equity consortium, Texas Pacific Group had withdrawn earlier to join British Airways in making a bid on Spain's Iberia.

Though Texas Pacific had said that Alitalia had made a loss of €626 million ($841 million / Rs3,433 crore) last year uncertainty over the carrier's factual financial situation has clouded the entire bid process.

A combination of industrial problems, fierce competition and poor cost control has left Alitalia financially drained - it has not made profits since 2002 - and in need of fresh investment.

The Italian government will discuss a series of options for Alitalia SpA, after an attempt to auction off at least 39 per cent of the airline fell through, Italian deputy prime minister Francesco Rutelli said.
'There are various alternatives and we will be discussing them tomorrow at the meeting of the ministers,' Rutelli said.

Italy's government is struggling to keep Alitalia out of administration and save face after Prime Minister Romano Prodi admitted the airline's auction had flopped, suggesting one-to-one talks to lure buyers.

Italy may still find a buyer for Alitalia after its auction to sell the company failed, but the government still faces the possibility of having to liquidate the country's flagship airline, analysts and officials said Thursday