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Race to rescue troubled Alitalia Progress in move to save Alitalia
(about 1 hour later)
Talks are due to continue in Rome on a rescue package for the Italian airline Alitalia, which is operating under a bankruptcy commissioner. Alitalia will cut 3,000 jobs under a new agreement reached with Italy's four main union organisations, Labour Minister Maurizio Sacconi has said.
The airline's workers have been resisting the several thousand job losses and salary cuts which could be required for a rescue solution. "The job cuts... they're around 3,000," Mr Sacconi told an Italian television programme on Monday.
But some progress has been reported in talks between the Italian government and trade union leaders. The four unions have signed a deal with CAI, a consortium prepared to invest in a new national Italian airline, but five other unions oppose the deal.
If no deal is reached, Alitalia could go into liquidation next week. Those opposed to the deal include pilots and cabin crews.
The government is trying to broker a rescue package with investors, which would involve a sell-off of profitable parts of the airline. 'Completely unacceptable'
With the airline saying it is running out of money to buy aviation fuel, the government needs to persuade unions to back a deal that involves job cuts. The new Alitalia will employ about 12,500 people including 1,500 pilots, 3,300 cabin staff and 7,650 technicians, workers and managerial staff, the Ansa news agency said.
Failed French takeover Massimo Notaro, the head of one of Italy's two main pilot unions, UP, described Sunday's deal as "completely unacceptable".
The only offer on the table is from Italian consortium CAI, which only wants Alitalia's profitable operations. Unions have so far rejected this deal. Five unions - SDL, ANPAC, UP, ANPAV and Avia - rejected the deal as "useless and provocative", while the four signatories - CGIL, CISL, UIL and UGL - were talking to the would-be buyers.
The BBC's Frances Kennedy, in Rome, says informal discussions throughout the day were meant to iron out enough of the obstacles to get the parties back to the table for a final do or die negotiating marathon. Last-ditch talks had been taking place overnight in Rome on a rescue package for Alitalia, which is operating under a bankruptcy commissioner.
The nine unions and the cartel of Italian investors wanting to buy part of Alitalia are still far apart on key issues, like job losses and salary cuts, our correspondent says. Alitalia faces liquidation if a deal is not reached. The airline says it is running out of money to buy aviation fuel.
Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia. Merger plans
In April, plans for the airline to be bought by Air France-KLM collapsed owing to union opposition to job cuts. Under the rescue proposal the Italian consortium has put forward a 1bn euro ($1.4bn; £800m) offer for the airline.
Italy's civil aviation authority said on Saturday that Alitalia's operating licence was at risk due to the airline's admission that it was running out of funds to buy fuel. Alitalia would merge with Air One, the country's second largest airline, and its 1.2bn euro debt would be absorbed by a second firm, which would then be liquidated.
Alitalia is currently being run by administrators after seeking bankruptcy protection on 29 August. A further meeting is planned around midday at the labour ministry to continue the negotiations, with only the four confederations invited.
The Italian government owns a 49.9% stake in Alitalia, but it cannot simply pump public funds into the airline as there are strict European Union rules preventing state support for airlines. Prime Minister Silvio Berlusconi has pledged to do all he can to save Alitalia. The government owns 49.9% in Alitalia.
In April, plans for the airline to be bought by Air France-KLM collapsed.