The Italian Government was expected to name Air One, the private airline, as its preferred bidder for Alitalia, the troubled national carrier, last night. Air One, owned by Carlo Toto, the Italian entrepreneur, faced competition from Air France-KLM.

Bidding for Alitalia closed last Friday. Air One was said to be the preferred bidder partly because it offered an “Italian solution” and partly because Air France-KLM wanted to downsize Milan Malpensa Airport. “A chorus of yeses for Air One,” the newspaper La Stampa reported. Il Messaggero’s headline read: “Air One bid takes off.”

“Obviously, some think that the Italian solution is the best right now”, Mr Toto observed. However, Anpac, the pilots’ union, said that Air One’s business plan offered “no real European integration for the future Alitalia.”

AP Holding, the parent company of Air One, said that it had the support of four banks – Intesa Sanpaolo, Nomura, Morgan Stanley and Goldman Sachs. Reports said that AP Holding was ready to buy the Government’s 49.9 per cent stake in Alitalia and try to buy out minority shareholders.

Luca Cordero di Montezemolo, the head of Confindustria, the employers’ association, backed the Air One offer, while leading unions called for “an Italian solution”. Confindustria said that Air One had guaranteed that it would maintain Alitalia’s two national hubs, at Rome and Milan, and up-grade international routes, with 90 new aircraft for short and medium-haul flights and 20 for long-haul services. It also planned to cut 2,750 jobs in a staff of 19,000. Air France-KLM said that it would cut jobs if its bid was successful.

Alitalia, which has been hit by strikes over restructuring plans and loses €1 million (£719,000) a day, has been trying to find a buyer for nearly a year. Maurizio Prato, the chairman, has indicated that he favours the Air France-KLM offer, but union leaders said that “if Alitalia were to go to a foreign company we would, in effect, be the only big European country not to have a flag carrier” .

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