Making a prediction that Alitalia can only run through an injection of EUR550 million euros of cash during this year, the analysts of Citigroup have stated that the ailing airline could totally run out of cash towards the end of this year if there is no funds made available. Revealing the findings of a research into the present state of the airline, the analysts further added that the airline was actually on the track to wipe out all its cash by the third quarter. However, thanks to the emergency loan granted by the government, the airline could get a breathing room.

Citigroup noted, "The government loan of EUR300 million (which is subject to state aid investigation by the European Commission) should help Alitalia survive to the end of 2008 but could be insufficient from 2009 onwards."

Notably, Italy's government owns a 49.9 percent stake in Alitalia, which is moving ahead with its third attempt to rescue the airline following the failure of the plans to sell the airline to Air France-KLM.

According to Citigroup, only a merger of the airline with smaller Italian carrier Air One appears to be a viable and meaningful solution for now, in addition to grounding the obsolete planes that would nearly halve the airline's capacity. As per the present estimation, an injection of about EUR billion equity is needed at present to save the airline. Also, the second-quarter results due to be released on 8th August are said to feature about a 20 percent drop in revenues due to cutbacks in Milan and a 23 percent fall in traffic.