March 30 (Bloomberg) -- Alitalia SpA, whose chief executive officer was replaced last month amid union opposition to job cuts, may report a fifth straight quarterly loss tomorrow, underscoring the need for Italy's biggest airline to reduce operating costs.

Alitalia, based in Rome, probably will say its fourth-quarter loss before interest and tax widened to 120 million euros ($145 million) from 81.5 million euros a year earlier, based on the median estimate of four analysts surveyed by Bloomberg News. The analysts said they didn't calculate the net loss because of the unpredictable way Alitalia has in the past reported the number.

Prime Minister Silvio Berlusconi's government, which last year pressured Fiat SpA, Italy's largest manufacturer, to keep jobs, owns 62 percent of the airline. On Feb. 27 the government named Marco Zanichelli, 56, to replace Francesco Mengozzi, 55. Mengozzi's plan to cut 2,700 jobs, about 12 percent of the workforce, triggered three walkouts this year, hurting sales.

``The key to understanding these changes is 90 percent political,'' said Massimo Nibbi, who helps manage $1.82 billion at Meliorbanca SpA in Rome and doesn't own Alitalia shares. ``I don't think the current CEO is better or worse than his predecessor.''

Berlusconi, who got elected in 2001 after promising to create a million new jobs, faces an electoral test in June when Italian administrative elections and European elections take place.

Zanichelli, who declined to be interviewed for this article, is negotiating with the government and Alitalia's nine unions over cost cuts. He aims to present a new industrial plan for the carrier on May 20. His plan is not likely to put the carrier's business needs ahead of political considerations, analysts said.

Political Influence

``Too much politics involved,'' said Roberto Brasca, head of equities at Anima SpA, which manages 2.2 billion euros and holds Alitalia shares. ``Alitalia is the only carrier that has not recovered in terms of valuation because there is no clear strategic, economic guideline. Mengozzi had a sensible plan.''

Shares of Alitalia have gained 16 percent over the last 12 months, valuing the company at 947 million euros, compared with a 66 percent gain for the Bloomberg Europe Airlines Index.

Mengozzi, who came to the airline after making the state railway profitable, said on Jan. 8 that Alitalia was losing 50,000 euros an hour and had to apply his plan or risk going bankrupt in six months.

Alitalia postponed releasing full-year figures until May 20 to give Zanichelli enough time to change the carrier's industrial plan. Alitalia did not report fourth-quarter 2002 figures. Bloomberg calculated the number, based on 2002 full-year and nine- month results.

2003 Loss

Alitalia has forecast a 2003 loss of more than 400 million euros. The carrier had losses in 2000 and 2001 and posted a profit in 2002 because KLM Royal Dutch Airlines NV paid it a 171.5 million euros fine for breaking their alliance.

Zanichelli has been with Alitalia since 1989 after working for fourteen years at steelmaker Dalmine SpA. Before becoming chief executive, he was director general at the airline in charge of the fleet, personnel and maintenance.

He also must resolve the question of what to do about Milan's Malpensa Airport, which was reopened in 1999 after a 1 billion- euro renovation. The airline has been pursuing a strategy of using both Malpensa and Rome's Fiumicino airport as hubs for operations.

When he first joined Alitalia in 2001, Mengozzi told shareholders that a look at Alitalia's results and Malpensa's performance ``can only lead to the conclusion of discarding'' the Malpensa hub strategy. KLM said it broke up with Alitalia because of Malpensa's unsuitability as a hub and the government's unwillingness to reduce its majority stake in the carrier.

Malpensa Commute

Travelers dislike the 45-minute drive from Malpensa to Milan's city center, preferring the 15-minute commute from the older city airport, Linate. Neighbors complain of pollution, noise and low-flying jets that blow tiles off their roofs.

Alitalia's chairman, Giuseppe Bonomi, is a proponent of Malpensa. Bonomi, who became chairman in 2002, is a member of the Northern League separatist party, a key ally for Berlusconi's government majority. He fought any effort to diminish the role of Malpensa in favor of Rome airport.

On March 24 Alitalia presented its summer schedule that includes more flights departing from both Malpensa and Fiumicino.

``From a financial point of view, Alitalia would have failed 20 times in the last 30 years,'' said Nibbi of Meliorbanca. ``The government must decide if Alitalia is a public company that the state will pay for or it throws it to the market where whoever buys it will cut thousands of jobs.''

The Italian parliament has halted its study of a decree allowing the government to reduce its stake in Alitalia to below 50 percent.

Editor: Stets, Gregori

To contact the reporter on this story: Mathias Wildt in Milan mwildt@bloomberg.net.

Last Updated: March 29, 2004 18:16 EST