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Air France-KLM Group SA's board approved its plans to bid for Italian state-controlled carrier Alitalia SpA and gain greater access to a market of almost 60 million people.

The bid, which Air France plans to make on March 14, will be subject to conditions, including acceptance by Alitalia's unions, the airline said in an e-mailed statement today. Paris-based Air France, the world's largest airline by sales, has been in exclusive takeover talks to buy the unprofitable Italian carrier since January.

"The markets may not like this development," said Pierre Boucheny, an analyst at Landsbanki Kepler in Paris. "They'd be taking over Alitalia at a time when the economic conditions aren't promising. And while Air France's purchase of KLM has worked out well, KLM was in much better shape at the time of its purchase than Alitalia is now."

Air France and Alitalia have been in what Air France Chief Executive Jean-Cyril Spinetta calls "exploratory talks" since 2003, although Air France made no offer during an initial round of bidding in early 2007. Initial bidders dropped out and Alitalia began looking for new partners last year.

The bid "will allow Alitalia to recover its status of being national leader," Air France said in the statement.

Alitalia has posted losses in seven out of the last eight years. Air France shares fell 4.4 percent in Paris to 15.73 euros, giving it a market value of 4.72 billion euros ($7.2 billion).

"Our approval will hinge on the actual guarantees for employment in Air France's offer," Fabrizio Solari, secretary general of the Filt-Cgil, one of Alitalia's main labor unions, said in a statement Monday.

Air France said Dec. 17 that it would offer to buy all of Alitalia in a stock-swap that valued the carrier at 35 cents a share, less than half its value at the time. Air France said then it would also underwrite a 750 million-euro sale of new shares as part of an investment plan worth 6.5 billion euros. The French carrier has said it would eliminate 1,500 jobs from Alitalia's business.

Air France already owns 2 percent of Alitalia and the two carriers are partners in the SkyTeam alliance, as is Northwest Airlines. The Italian airline has about 1.2 billion euros in debt and needs to buy new aircraft to modernize its fleet.

Air France has said it would replace Alitalia's old MD-80 short- and medium-haul planes by 2017 and start beefing up the fleet in 2011. Alitalia would cease trading while retaining a local identity and operating name, as KLM Royal Dutch Airlines did when Air France bought it in 2004.

The Italian government owns a 49.9 percent stake in Alitalia and may end up as an investor in the new company.