UPDATE 2-Air France to decide Alitalia stake next week-media
* Bloomberg says Air France board to decide on possible bid Monday
* La Tribune says Air France to decide on capital increase next week
* Air France declines comment, CEO has said it lacks money for buyout (Adds French report about capital increase, earlier CEO comment)
PARIS/ROME, Sept 19 (Reuters) - Air France-KLM will decide what to do with its stake in Italian airline Alitalia SpA next week, according to two media reports on Thursday.
Bloomberg, quoting a person familiar with the plan, said the Air France board will meet on Monday to decide whether to bid for control of Alitalia by the end of this year.
French financial news site La Tribune said Air France will decide next week whether or not to take part in an Alitalia capital increase.
An Air France spokesman said the company would not comment on rumours and could not say whether a board meeting or other meetings were planned next week.
The Franco-Dutch group already owns 25 percent of Alitalia following the Italian firm's rescue from bankruptcy in 2008.
Other shareholders in the loss-making carrier include Italian bank Intesa Sanpaolo, road operator Atlantia and holding company IMMSI, the owner of scooter-maker Piaggio.
Some of these investors might sell out after the expiry in mid-October of a lock-up period.
But Air France chief executive Alexandre de Juniac in January said there were no negotiations with shareholders and the airline's resources for such a move were extremely limited.
There have been similar reports of merger talks which came to nothing and French officials privately have often described these in the past as trial balloons from the Italian side.
Italian transport minister Maurizio Lupi said on Thursday he would meet with his French counterpart Frederic Cuvillier next week to discuss, among other things, the fate of Alitalia.
"I will meet the minister ... we will also speak of Alitalia," the minister said on Thursday.
In an earlier interview with daily La Repubblica, Lupi suggested Italy may look for another partner.
"Either this partner sees our asset as a strategic one and invests in the company as it has done with KLM, or we need an alternative solution," he was quoted as saying.
Alitalia, which quadrupled its net loss to 280 million euros ($374 million) in 2012 compared with the year before, said in July it needed 300 million euros this year to keep running but expected to break even by 2015.
Earlier this month the carrier hired boutique investment bank Leonardo & Co to help tackle its liquidity crisis that may see it running out of cash before the year's end.
Only Air France-KLM is seen as having a real interest in remaining an industrial partner of the carrier, fueling speculation over whether the group would increase its stake or inject capital into the group.
Alitalia and Abu Dhabi-based Etihad have frequently been mentioned in the context of a possible tie-up, but so far Etihad has said there were no talks between the two firms beyond those on code sharing.
A source also added this month Etihad was not keen on another investment in a European carrier. ($1 = 0.7582 euros) (Reporting by Gilles Guillaume, Alberto Sisto and Agnieszka Flak; writing by Geert De Clercq; Editing by Elaine Hardcastle)
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