European airlines are going through a period of restructuring

Rival Italian airline Air One and Russian carrier Aeroflot are now the last remaining bidders for Italy's loss-making flag-carrier.

Rome aims to sell at least 39.9% of Alitalia, which would require the buyer to launch a bid for the whole firm.

The Italian government has set a 15 June deadline for final offers.

While it wants to sell a minimum 39.9% stake in Alitalia, it has said it would be willing to dispose of its entire 49.9% holding.

Alitalia shares were down 3.4% to 0.83 euros by lunchtime on the Milan stock exchange.

Heavy losses

Both remaining bidders are backed by Italian banks, Air One by Intesa Sanpaolo and Aeroflot by UniCredit.

Texas Pacific's withdrawal came after the private equity firm announced earlier this month that it had joined British Airways in bidding for another European flag carrier, Spain's Iberia.

Alitalia made a loss of 626m euros ($841m; �423m) last year amid fierce industry competition and high costs.