Alitalia unions offered new deal

Alitalia could face bankruptcy if the Air France-KLM offer fails

Air France-KLM has stood by its plans to cut more than 1,600 jobs at Italy's loss-making airline Alitalia, which it wants to buy.

But in fresh proposals to the union representing Alitalia workers, Air France-KLM said it would offer affected staff greater benefits.

Officials of both sides will meet later to discuss the new terms, but the initial union reaction was negative.

Air France-KLM has said it will drop its takeover bid without union backing.

The new measures include offering a greater number of Alitalia workers early retirement benefits, or transfers to other positions or duties.

Italy's government, which owns 49.9% of Alitalia, approved the takeover earlier this month, but plans by Air France-KLM to cut jobs in order to lower costs have riled the unions.

"We do not intend to compromise on the layoffs, which are too many," said Marco Veneziani, national secretary of the transport branch of UIL.

Election matter

Air France-KLM argued that further concessions would undermine its objectives to revive Alitalia, which loses more than one million euros (�792,245) a day.

The Franco-Dutch firm's chief executive, Jean-Cyril Spinetta, said "the social measures" would help to "alleviate the more difficult situations of layoffs".

The new proposals do not alter its radical restructuring plan for Alitalia, which includes grounding some flights, shutting its cargo unit by 2010 and ending the contracting out of ground handling and aircraft maintenance.

Air France-KLM had hoped an agreement would be reached by 31 March, but it has suggested that it is prepared to continue negotiations beyond that deadline if necessary.

The long-running battle has become a key issue in Italy's general election campaign, with fierce resistance to the deal from the leader of the centre-right opposition, Silvio Berlusconi.

Mr Berlusconi has frequently alluded to a home-grown bidder stepping in as an alternative, but no company has so far been forthcoming.

E-mail this to a friend

Printable version