Alitalia is in a "comatose" state and cannot repay over EUR1 billion euros (USD$1.4 billion) in debt due in the next three years, its chairman said, raising new doubts on whether the airline can survive without a buyer.

The Italian airline is expected to post losses of just under EUR400 million (USD$563.1 million) excluding special items this year, and needs a strong alliance to turn its fortunes around, Maurizio Prato told a Senate hearing.

Alitalia has begun a fresh hunt for a suitor to resuscitate it after an auction for the Italian state's controlling stake in the airline collapsed in July.

"Alitalia is in a comatose state, it's on life support and I am very surprised by the almost general state of denial," said Prato, who was appointed last month.

He also attacked Alitalia's unions for their attitude to its worsening condition.

"I was expecting a different type of response given the time I dedicated in August talking to them... They negotiate, but then they overrule us and ask for a meeting with the government like they did in the past few days."

He said the company did not have enough money to repay EUR320 million (USD$450.5 million) of loans in the next two years or EUR714 million worth of bonds due in 2010.

Alitalia posted a 2006 loss of EUR626 million after the carrier wrote down the value of its fleet and has warned its results this year would fall short of forecasts.

Since the flop of the auction for Rome's 49.9 percent stake in the airline, Alitalia has had initial meetings with potential suitors and unveiled a new three year survival plan to keep it afloat while the search for a buyer continues.

Prato said he would report back to the board on the search in the first 10 days of October. The process would reach a more decisive second phase by mid-November, he said. No clear front-runners have emerged so far, although small domestic rival Air One has expressed interest and had a meeting with Alitalia's sale adviser last week.

Russia's Aeroflot, another of the three parties shortlisted in the failed auction, denied an Italian news agency report it was still in the bidding.

"Aeroflot is not considering buying Alitalia," Deputy General Director Lev Koshlyakov said on Tuesday.

Italian media say long-time commercial partner Air France-KLM could step in despite snubbing the failed auction.

The head of Air France KLM, Jean-Cyril Spinetta, said in a newspaper interview on Monday he expected talks on a possible alliance with Alitalia to start next month.