The Air France-KLM Group, based in Paris, France, has reached an agreement to buy 25% shares of Alitalia, the flag-carrier airline of Italy, the Italian media quoted sources as revealing.

The Italian Air Company (CAI), the Italy-based consortium of investors, has formally taken over Alitalia, the flag-carrier airline of Italy.

Deutsche Lufthansa AG, the national airline and flag carrier of Germany, has started an Italian subsidiary based in Milan, Italy.

With more labour unions supporting the move by Italian investor CAI consortium to buy the Alitalia, the flag-carrier airline of Italy, prospects have become brighter for the bailout of the cash-strapped carrier.

Alitalia, the flag-carrier airline of Italy, has posted on the company’s website an invitation calling for bids from investors before September 30, 2008, in a last-ditch attempt to rescue the troubled airline.

  The bankrupt Alitalia SpA, the flag-carrier airline of Italy, will be re-launched as a new company on November 1, 2008.

The European Commission has begun what it describes as an “in-depth investigation” into whether a loan amounting to €300 million ($465 million) from the government of Italy to the airline Alitalia violates rules on state aid.

Major airlines of Europe have urged the European Commission to oppose the Italian government's recent $468-million loan to Alitalia intended to prevent the state-controlled airline from going bankrupt.

Air One, the airline based in Rome, Italy, has ordered 24 aircraft from Airbus Industrie, the aircraft-manufacturing consortium based in Toulouse, France.