Alitalia will file for bankruptcy protection and the airline be broken up following a decision of the board today.

Parts of the airline will be sold to a holding company made up of 16 Italian investors and merged with Italian domestic carrier Air One. The break up will result in at least 5,000 job losses.

Air France-KLM has declared an interest in taking a minority stake in the new ‘Alitalia’. The Franco-Dutch airline had previously sought to buy Alitalia outright, but pulled out of a deal early this year.

The break up of the loss-making carrier and sale of the Italian government’s 49.9% stake will see the end of Milan Malpensa as a hub airport, the Alitalia fleet slashed and ground service and cargo divisions sold off.

The Italian banking group overseeing the process, Intesa Sanpaolo, said the next four weeks would be crucial in determining whether the rescue succeeds. Unions at Alitalia oppose a break up and redundancies.

There should be no immediate impact on services from the UK because of the break up. However, strikes might be expected.