ROME (AFP) - Alitalia management and flight attendants struck a crucial deal on job cuts that would allow the struggling airline to keep flying, but management still needs to win government support for its overall strategy.
The deal, signed at dawn, would slash cabin personnel costs by 110 million euros (134 million dollars) and cut 900 cabin crew, union sources said -- opening the way to a privatization next year of the heavily indebted Italian state carrier.
Originally management had proposed reducing cabin crew staff on short term contracts by 1,050. The unions had hoped to limit the losses to 700.
Alitalia has already reached agreement with pilots and ground staff on measures to keep it aloft.
The accord was reached after management early Friday set the unions a 24-hours to conclude an agreement.
There was no confirmation on the deal from Alitalia managers.
The firm's directors are to meet on Monday to give official endorsement to a rescue package that would enable the company to draw on a 400-million-euro government-backed bridging loan that is critical to its future.
The unions have insisted on the accord and the rescue package being formally approved by the government, which owns a 62.39 percent share in the company.
State measures to deal with the consequences of the job losses are likely to cost between 90 and 100 euros, according to the daily Repubblica.
Labor Minister Roberto Maroni said that "a few days" would be needed to examine the package but that it was likely to be presented to the next cabinet meeting on September 25.
The Italian flag-carrier, which has lurched from crisis to crisis for years and nearly collapsed earlier this year, currently employs about 20,700 people full time in addition to a large contingent of temporary staff.
This latest and perhaps most critical deal foresees flight attendants flying more hours and reducing the number of cabin crew on medium-haul flights from four to three, the sources said.
Overall, job losses at Alitalia will be around 3,700 out of a total workforce of 20,700. Management had originally demanded cuts of 5,000 in all three categories.
Alitalia is trying to save 315 million euros by reducing its labor costs through a restructuring plan that runs from 2005 to 2008.
On Wednesday, the airline reached an accord with pilots calling for increased flying time, a cut in the number of pilots assigned to certain routes and the elimination of 289 jobs.
On Thursday, the carrier said it had reached a wage-freeze agreement with ground personnel in exchange for a reduction in the number of job cuts to 2,500 from 3,500.
For the past four weeks, unions and management have been locked in talks aimed at rescuing Alitalia, which has a fleet of around 180 planes and carries 22 million passengers a year. But its cash reserves have been rock-bottom, with management saying it could run out of money by the end of the month.
Alitalia has already said it plans to transfer 250 pilots and 500 flight attendants from Rome to Milan, where it does most of its business. Some 11,000 Rome-based staff currently commute to Milan, at a high cost for the airline.
The company said on July 30 that it had incurred losses of 330 million euros (400 million dollars) in the first half of 2004, after posting a net loss of 519.2 million euros for all of 2003.
The company has not made an operating profit since 1999. Its share value has declined by more than 90 percent since early 2000.