The plan was outlined in a government decree published late on Monday night.

Italian media reported that it could cost taxpayers up to 600 million euros ($670 million) to re-nationalise the airline.

Prime Minister Giuseppe Conte's government on Monday agreed a 25-billion-euro rescue package designed to help families and businesses affected by the economic fallout of an outbreak that has killed more than 2,100 people in Italy.

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One of the measures provides for the creation of “a new company wholly controlled by the ministry of economy and finance, or controlled by a company with a majority public stake, including an indirect one” to take over the airline.

Italy's AGI news agency said the government was setting up an 600-million-euro fund to deal with the damage the pandemic has caused to the aviation sector.

Photo: AFP

Some of the final details of the Italian economic rescue programme are do to be finalised next month.
Alitalia has floundered in the face of fierce competition from low-cost carriers such as EasyJet and Ryanair.

But analysts warn that it is also too small – and has too many staff for the number of flights it operates – to compete with its rivals.

It flew only 22 million passengers and saw its market share in Italy slip to 14 percent in 2018.
Germany's Lufthansa and the Atlanta-based Delta Airlines each carried around 180 million passengers that year.

Alitalia's attempts to secure rescues from either the Italian state railway Ferrovie dello Stato or Lufthansa failed in January.

The company filed for bankruptcy in 2017.