Page last updated at 07:30 GMT, Wednesday, 19 March 2008

Alitalia unions reject job cuts

Alitalia plane
Air France-KLM said the takeover would be "painful"

Talks between unions representing workers at Alitalia and Air France-KLM, which wants to buy the Italian airline, have faltered over proposed job cuts.

The unions rejected plans to shed more than 1,600 posts at the troubled carrier, but Air France says they are crucial to the survival of the company.

Air France had said union agreement was necessary for the deal to go ahead.

The Italian government, which owns 49.9% of the loss-making company, approved the takeover on Monday.

The talks between unions and the Air France-KLM lasted several hours and ended without agreement.

"Our opinion on the plan is very critical, and there's no reason for us to look into it further," the unions representing Alitalia workers said in a statement.

Under the proposed takeover, up to 1,600 jobs would go in the airborne division of Alitalia, with further cuts in the ground services operations.

Air France-KLM's offer valued Alitalia at 138m euros or 0.10 euros per share, an 81% discount to its stock price on Friday.

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