April 4 (Bloomberg) -- Italy's civil aviation authority ENAC may revoke Alitalia SpA's license in the next three weeks if the unprofitable state-controlled airline doesn't provide plans to raise capital.

``If Air France talks fail and there's no recapitalization in sight, we'll have to intervene,'' said Vito Riggio, the head of ENAC, in a Bloomberg Television interview. The Rome-based authority plans to meet with Alitalia and officials from the Finance Minister next week to ask for guarantees on the company's ability to meet payments.

Alitalia yesterday named a new chairman to replace Maurizio Prato, who quit after Air France-KLM Group abandoned takeover talks April 2. Air France said it pulled out of exclusive talks because counter-proposals from unions to the airline's bid weren't acceptable. Prime Minister Romano Prodi's government yesterday asked the airline to verify whether Air France is willing to restart negotiations.

The aviation authority has been monitoring Alitalia's situation and met with Alitalia's management two months ago to discuss its financial situation.

Alitalia is losing more than 1 million euros ($1.6 million) a day and had less than 200 million euros of cash and credit available at the end of February.

``We are very concerned now as the only chance of a capital injection is fading away,'' Riggio said. ENAC has the power to revoke the carrier's license if it's in ``permanent financial difficulty and has no clear prospects,'' he said.

ENAC also can grant temporary licenses to give airlines time to turn around their finances. ``If they don't convince us next week, well have to take action,'' he added.

If Alitalia were put into special administration, that would have repercussions on the Italian market, he said. Alitalia controls about half of the Italian air transportation market.

Alitalia shares will remain suspended in Milan until April 8, when the unprofitable airline will decide if it has enough money to stay in business.

To contact the reporter on this story: Marco Bertacche in Milan at mbertacche@bloomberg.net; Andrea Massa in London at amassa@bloomberg.net.

Last Updated: April 4, 2008 13:14 EDT