Page last updated at 11:34 GMT, Wednesday, 26 March 2008

Air France 'saving Alitalia jobs'

Alitalia plane
Alitalia unions appose any job cuts

Air France-KLM has softened its stance on planned job cuts at takeover target Alitalia, as it continues to try to win the backing of Italian unions.

With talks due to resume on Friday, Air France-KLM's chief executive Jean-Cyril Spinetta said none of Alitalia's 2,100 staff "would be abandoned".

This compares with Air France-KLM's previous view that at least 1,600 Alitalia jobs would need to go.

Air France-KLM says it will abandon the takeover without union backing.

It already has the support of the Alitalia board.

Alitalia unions have so far rejected Air France-KLM's approach because of the issue of job cuts.


"No worker would be abandoned and a solution would be designed for each of the 2,100 employees concerned," said Mr Spinetta.

Air France-KLM has also indicated that it is prepared to continue talks with Alitalia unions before the current 31 March deadline.

Alitalia is losing 1m euros ($1.6m; 800,000) a day.

Its protracted sale has now dragged on since 2006.

While Air France-KLM's talks with Alitalia's unions continue, matters have been complicated by next month's general election in Italy.

While the current government of Prime Minister Romano Prodi has agreed to sell its 49.9% stake in Alitalia to Air France-KLM, opposition leader Silvio Berlusconi has promised to call off the sale if it wins the election.

Mr Prodi's government insists there is no viable Italian rival bid, but Mr Berlusconi says one should be found.

Alitalia's board is due to meet later on Wednesday to discuss the latest developments.

Shares in the airline were up 14% in Wednesday trading.

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