Italy crisis will not delay Air France Alitalia bid

ROME (Reuters) - Air France-KLM still intends to deliver its bid for Alitalia as planned in the coming weeks, despite the resignation of Prime Minister Romano Prodi, a source close to the French airline said.

"We confirm that it is our strong determination to present the definitive offer within the timetable set out. Despite the political situation the Alitalia dossier remains a priority," the source said.

The government collapse sent Alitalia shares at market open to below 0.62 euros -- an all-time low according to Reuters data -- but they recovered to close up 2.04% percent on the day at x0.6751 euros on a broadly flat Milan bourse.

When Prodi's resignation looked likely earlier this week, Italy's transport minister, Alessandro Bianchi, said the 8-week talks between the airlines would go ahead as normal.

"(Alitalia Chairman Maurizio) Prato has full powers to conduct and conclude talks with Air France, with the duty to keep the minister informed, even during a government crisis," Bianchi told Reuters.