Alexandre de Juniac, chief executive of the Franco-Dutch group, said he had been "offended and discouraged" by the conduct of talks to keep Alitalia afloat. "We are not here to put money into a company that cannot last for the long term. We need a real, robust plan that will stay the course," the former French finance ministry official told reporters after announcing higher third-quarter profits. The Italian airline declined to comment on the writedown, saying only that its flights continued without disruption. It later said its nine-month loss had widened to 162 million euros ($220.24 million)from 119 million euros a year ago. Hurt by competition from low-cost carriers and high-speed trains, Alitalia has asked shareholders to take part in a 300-million-euro capital increase. But it said on Thursday that only three of its 21 Italian investors had subscribed so far. Air France-KLM, forced by a weak economy to put back its own debt reduction plans by as much as a year, says it backs Alitalia's financing move in principle. But it has kept the airline guessing over whether it will participate, despite mounting pressure from Italian shareholders. If it refuses to participate in the increase, Air France-KLM's 25 percent stake will fall automatically to 11 percent. Alitalia Chairman Roberto Colaninno, who led the group of Italian investors which last rescued Alitalia in 2008, said he would no longer be a manager in the company after the capital increase. Air France-KLM, which took part in a shareholder loan early this year, has given few details on its conditions for investing more in Alitalia which has seen a decade of losses. But de Juniac set out a broad agenda for any agreement that appeared to include jobs. The conditions cover the medium-haul and long-haul networks, "social mechanisms" and "financially, a very strong restructuring," he told a news conference. "We don't have the money to do something temporary. This is not a punishment for the Italians or bad treatment. I think it is good for the Italians that we do this," he said, adding Air France-KLM had sometimes been kept "out of the loop". Air France-KLM took an impairment charge of 119 million euros, fully depreciating the value of its 25 percent stake in Alitalia, which it came close to buying in 2008. "This is an important sign because it comes back to the battle over price. Air France is saying the company is already worth practically zero," said Andrea Giuricin, transport analyst at the University of Milan Bicocca and author of a book called "The endless privatization of Alitalia". Italy's emblematic flag carrier has lurched from crisis to crisis since 2000, when talks with what was then a standalone Dutch airline, KLM, broke down in acrimony. KLM merged with Air France in 2004, kicking off a round of European consolidation. The Italian government has urged Alitalia to seek another foreign partner if talks collapse with Air France-KLM, but interested candidates are seen as few and far between. "Air France-KLM seems to be calculating that there are no other candidates for Alitalia," a Paris-based banker said. "If it doesn't get the guarantees it wants on restructuring, then it would have every reason to let its shareholding be diluted, even if it has to come back later. It might end up more expensive, but it would be safer," he added. Some analysts are wary about further involvement, despite Italy's appeal as Europe's no.4 travel market. Shares in Air France-KLM rose 0.4 percent after the latest rebuff. "We believe AF-KLM should not invest further in Alitalia," said Citi airlines analyst Andrew Light in a note. Air France-KLM said it faced "major difficulties" in boosting its medium-haul and cargo businesses. Earnings before interest, tax, depreciation and amortization would be about 2.5 billion euros in 2014, at the low end of its target range, and a 2 billion net debt reduction would only be achieved in 2015. Air France-KLM had previously set its sights on reaching the debt goal by the end of 2014. It is in the midst of a major restructuring plan which it said was otherwise on track. (Reuters)