The airline faces being grounded

They said that the number of job losses will probably be higher as it does not count staff on short-term contracts.

However, staff unions held back from calling a strike, saying they wanted to work 'calmly' on the proposals.

The rescue strategy was announced late on Monday as the state-owned carrier struggled to stave off bankruptcy.

"The plan, as it stands, has to be changed," said Savino Pezzotta, head of Cisl, one of Italy's biggest unions.

Compromise?

Workers' representatives met on Tuesday morning to discuss their response to Alitalia's proposals and will meet with the company later in the day.

While saying the plan "confirmed the darkest forecasts", there were signs that a compromise might be possible.

"Unions reconfirm their willingness to look for all possible solutions including via productivity improvements," they said in a statement following their meeting.

The future of workers is uncertain

Earlier on Tuesday, a representative of the pilot's union told the BBC that they were unhappy with the proposals because cutting staff numbers and boosting working hours would "increase the possibility of incident or accident".

Alitalia staff have already disrupted the airline's operations with strikes that grounded more than 1,000 flights in April and May.

The company said it needs union agreement by 15 September or it will fail to qualify for a 400m euro ($482m; �271m) bridging loan that has been approved by the government and the European Union.

Alitalia facts Started in 1947 with flight from Turin to Catania, via Rome By 1970, becomes first airline to fly an all-jet fleet Today, 62% of the company is controlled by the state It has made an operating loss in each of past five years Alitalia shares have dropped by 80% in value since 2000

It has warned that it will run out of money by the end of the month should the rescue package be rejected by the unions.

Italy's industry minister Antonio Marzano said that there was no other option but to approve the Alitalia rescue plan.

The European Commission would reject a cash injection from the state if the government remains a majority shareholder.

The Italian government has signalled its willingness to let Alitalia go bankrupt if the company and unions fail to reach an agreement.

Under the plan, which runs from 2005-2008, the company would look to:

• Cut 5,000 jobs from its staff of 20,700
• Split into AZ Service and AZ Fly: AZ Fly would manage air transport activities, while AZ Service would handle the ground service business
• Break even in 2006, with sales 13% higher than in 2003
• Post a profit of 1.03bn euros by 2008
• Make payroll savings of 315m euros in 2005-2006.

More cash needed?

The plan has been devised by Giancarlo Cimoli, who took over as chief executive and chairman in May and was credited with turning around Italy's state railway company.

Alitalia shareholders are scheduled to gather on Wednesday, amid press speculation that the management will announce further measures to shore up the company's finances.

Mr Cimoli has talked about the need for a capital increase of as much as 1.5bn euros, though this would be dependent on the rescue plan getting approval.

Alitalia shares dropped almost 2% in early trading on Tuesday.

The problems facing Alitalia are far from unique.

Carriers have been hit by the emergence of low-cost rivals, as well as high fuel costs and a slump in demand for air travel following the 11 September 2001 terrorist attacks in the US and an outbreak of the killer Sars virus in Asia.