ROME (AFP) - Alitalia bosses and union and government officials forged a deal to save the troubled Italian flag carrier after thrashing out the details of redundancy payments for 3,700 workers who will lose their jobs in a restructuring plan.
The deal, agreed hours before Alitalia was due to announce its half-yearly results, has angered the airline's low-cost competitors across Europe.
They complained in a letter to the European Commission that the restructuring plan constitutes illegal state-aid.
Alitalia and the unions representing its personnel had already reached agreements on new work contracts and a restructuring plan under which the company is to be split into two units -- ground service and flying operations.
But the final hurdle to agreement, settling the issue of compensation for those who will lose their jobs under the controversial plan, was finally overcome in the early hours of Wednesday morning after all-night talks.
Alitalia chairman and chief executive Giancarlo Cimoli said the deal guaranteed the company's future.
"I think that we obtained what we wanted, the continuation of the company."
The agreement opens the way for the release of a 400-million-euro (490-million-dollar) state-guaranteed bridging loan for Alitalia, ensuring the company has sufficient cash until the launch of a capital increase expected early next year.
The cost to the state of the five-year package was previously estimated at between 450 million and 500 million euros, but Cimoli said Wednesday that the total cost would be significantly less.
"The cost of the entire operation ...is much less than 450 million euros. I believe it will be around 300 million," he said.
The general secretary of the Filt-CGIL trade union, Fabrizio Solari, said: "The main objectives have been reached. Now we have to relaunch the business."
Shares in the carrier were sharply up in early trading Wednesday, the company showing a gain of 4.77 percent to 0.2965 euro.
The government holds a 62.39 percent stake in the company, which is 1.6 billion euros in debt.
In order to secure the deal, Social Affairs Minister Roberto Maroni proposed that those put out of work in the process should receive unemployment benefits for two years and then redundancy payments for three years, union sources said.
Any top up payments will be up to the companies and workers involved, the minister said.
Meanwhile, a group of low-cost European airlines have written to the European Commission arguing that Alitalia's restructuring amounts to illegal state aid, the Financial Times reported.
Ryanair, AirBerlin, Wizz Air and Valreweb complained that any shift of liabilities between the company's ground service unit and its flying operations would be tantamount to state aid, the paper said.
In the letter to Transport Commissioner Loyola de Palacio and Competition Commissioner Mario Monti, they warned that "any form of state aid to Alitalia will be subject to an official challenge."