Expected cutbacks to Italy's national carrier Alitalia are set to spark an auction for access to its Heathrow landing slots, according to analysts.

The troubled airline, which reported a first-half net loss of US$292.4 million, plans to scale back the number of flights that it offers as part of a cost-cutting exercise.

According to the analysts, the opportunity to pick up Heathrow slots, which are so rare they can be traded between airlines for up to $40 million, would be of interest to the three main UK carriers, British Airways, bmi and Virgin Atlantic.

US carriers Delta and Continental could also seek access to the slots ahead of a liberalisation of air travel rules next year.

Meanwhile, Italy's transport ministry will meet today to discuss Alitalia's Milan airport slots.

Europe's biggest low-cost carrier Ryanair jumped in with expansion plans in Alitalia's backyard last week as the Italian flag carrier looks to cut routes at Malpensa in half for a survival plan.

Ryanair announced on Thursday it was ready to launch 80 routes to Milan catchment airports Orio al Serio -- where it already operates -- and Malpensa, a new departure, with planes worth more than US$1 billion from its fleet.

Executives from Milan's airport operator SEA met with Ryanair management on Friday in a meeting the operator called "productive." Another meeting is to follow.

State-controlled Alitalia announced a survival plan in August that included scaling back its presence at Malpensa. Alitalia has hubs at Malpensa and Rome's Fiumicino.

An attempt by the government to sell the airline flopped in July and management must now find a buyer.