ROME (AFP) -– The investor group Italian Air Company (CAI) formally took over ailing national flagship Alitalia on Friday in a long-awaited billion-euro deal.

""Today the sale of (Alitalia's) assets to CAI was signed by Alitalia's special administrator Augusto Fantozzi. From today onward, CAI is the owner of Alitalia,"" CAI chairman Roberto Colaninno told a news conference.
CAI, made up of a consortium of Italian industry figures, has agreed to pay 1.052 billion euros (1.4 billion dollars) for Alitalia's passenger operations, which it is merging with Air One, Italy's number two airline.
It is to retain 12,500 Alitalia workers while cutting some 3,250 jobs.
The new Alitalia will cede a stake of between 20 and 25 percent to a foreign partner -- either Air France-KLM or Lufthansa of Germany -- to be selected by the end of the year, Colaninno said.
CEO Rocco Sabelli told the news conference that the company had also received a proposal for a commercial tie-up with British Airways.
Sabelli, who will be the operational chief of the new Alitalia, said CAI was more interested in a ""major commitment"" involving a foreign stakeholder.
""We will select the best proposal, while also keeping in mind the timeline which should not be too long,"" he said. The choice will be submitted for approval to CAI's 21 Italian stakeholders.
Italian media have suggested Air France-KLM is the frontrunner, but Lufthansa enjoys support from Prime Minister Silvio Berlusconi and his political allies in the Northern League.
Before winning general elections in April, Berlusconi notably opposed an offer for the Italian government's 49.9 percent stake from Air France, saying he wanted the airline to stay in Italian hands.