An Italian regional court will decide on February 20 whether to annul a decision allowing Air France-KLM to hold exclusive talks to acquire Alitalia, judicial said on Tuesday.
The TAR court is reviewing a lawsuit filed last month by Alitalia's domestic rival Air One as it prepared another bid for the loss-making airline.
Air One's previous offer was rejected by the outgoing government in favor of the one made by Air France-KLM, whose talks with the Italian airline are to last until mid-March.
The prospect of another bid has been pushing Alitalia shares higher. They were up nearly 3 percent to their highest since January 21 in morning trade before turning negative amid a broader market slide.
Air France-KLM is offering 0.35 euro per share for Alitalia in an all-share deal.
With Italians set to go back to the polls in mid-April after the collapse of Prime Minister Romano Prodi's government, doubts about whether the sale will go through have risen. Prodi's government launched Alitalia's sale in December 2006 by putting up for sale the Italian state's 49.9 percent stake in the carrier.
Italian Infrastructure Minister Antonio Di Pietro said it would be inappropriate for a fallen government to approve a deal on Alitalia.
"Even if correct from a formal point of view, I believe it would be inappropriate that an operation of such importance would be pushed through by a government that is expiring, or in fact, expired," Di Pietro told reporters at an event in Milan.
The prospect of Air France-KLM taking over Alitalia has met fierce opposition from politicians and business leaders in northern Italy over fears the region's main airport will lose its importance.
Even the manager of Malpensa Airport, located near the country's finance and fashion capital of Milan, plans to file a lawsuit seeking damages over Alitalia's plans to reduce its flights at Malpensa and refocus on its Rome hub.
Alitalia will more than halve its slots at Malpensa to 170 daily from 350, the head of the airline's passenger and cargo division told a news conference on Tuesday.
Air One has won the backing of Italian banking giant Intesa Sanpaolo and local newspapers have reported a growing number of business leaders willing to help with its new bid.
The latest to lend its support was UCIMU, an association of machine tool manufacturers, nearly all of whose members are based in northern Italy.
But one local politician warned time was running out for them to find an alternative solution to Alitalia's future.
"We can't allow ourselves to prolong this and bring about Alitalia's collapse," Filippo Penati, head of the province of Milan, told reporters at an event on Tuesday.
Alitalia is losing more than EUR1 million a day and executives warn it will need a cash injection of at least EUR750 million (USD$1.1 billion) to keep flying solo if it is not bought by the middle of this year.
