Alitalia has appointed Aristide Police as its new chairman in the place of Maurizio Prato, who resigned after Air France-KLM has withdrawn its offer to acquire the Italian airline. Air France-KLM withdrew from the deal after talks with Alitalia's workers' unions failed.

After a 15-month effort to find a buyer for beleaguered Italian airline Alitalia (AZPIA), the proposed sale suffered a heavy setback late on Apr.

By David Jolly and Nicola Clark Alitalia's last chance to avoid bankruptcy appeared to have failed Thursday, after new demands from the Italian flag carrier's unions led Air France-KLM to abandon takeover talks.

By Nicola Clark Elisabetta Povoledo contributed reporting from Rome. David Jolly contributed from Paris.

Italian airline Alitalia has reported that it has stopped merger negotiations with Air France-KLM, labor unions and professional associations.