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Alitalia (AZPIa.MI: Quote, Profile, Research, Stock Buzz) remained airborne on Saturday but Prime Minister Silvio Berlusconi ruled out any last-minute rescue by a foreign airline and said Italy’s flag carrier could be headed for bankruptcy.

“There is no possibility of another rescue bid so it could be that our Alitalia is heading towards bankruptcy procedures,” said Berlusconi, whose attempt to rally an Italian consortium to salvage the airline tripped this week on trade union opposition.

Alitalia flights were operating normally but may be grounded in a matter of days, and the airline liquidated, if there is no last-minute reprieve for talks between trade unions and the CAI consortium, which withdrew its offer on Thursday after pilots and flight attendants refused to accept its conditions.

Suffering from high fuel prices and an economic downturn that has hit airlines globally, Alitalia has been on the brink of collapse for years as political interference and labor unrest bled it of cash and caused it to pile up debt.

The government rules out further state aid or, as some leftists propose, the denationalization of Alitalia paydayloans. Italy is already in trouble with the European Commission over a 300 million euro ($435.2 million) loan to keep the airline flying.

Berlusconi returned to power in May promising to rescue the airline, in which the state owns a 49.9 percent stake, and keep it in Italian hands. He had opposed an offer for Alitalia by Air France-KLM (AIRF.PA: Quote, Profile, Research, Stock Buzz) under the previous centre-left government.

Union chief Guglielmo Epifani suggesting Alitalia should now be “sold to a big international airline”.

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