Alitalia unions in final talks

An Italian investor group leading a bailout of Alitalia held make-or-break talks with the carrier's unions on Thursday, as protests by airline workers disrupted traffic and led to 50 cancelled flights.

The two sides initially had a Thursday deadline to reach a deal, though Alitalia's bankruptcy commissioner extended that to Friday. He has warned unions he will terminate labour contracts and shut down the loss-making national airline if talks fail.

The unions, who thwarted Alitalia's sale to Air France-KLM SA this year, are split over whether to back the plan that foresees the investor consortium, CAI, taking over the bankrupt airline's best assets to relaunch it.

One major union has backed the plan, but the airline's pilots and flight assistants have rejected efforts to cut more than 3,000 jobs, trim salaries and reduce the fleet and network.

The talks, which began on Thursday morning and were expected to continue late into the night, appeared to have made little progress before an afternoon break.

"The risk that the situation goes downhill fast is high," said Stefano de Carlo, an official from the ANPAC pilots union.

"The responses (we got) on the plan are not satisfactory, because they don't make changes to the network or the fleet."

Another union official, Giuseppe Caronia of the Uilt union, said his group was unwilling to accept any salary cuts.

About 50 Alitalia flights were cancelled at Rome's Fiumicino airport due to an impromptu union meeting, said a person briefed on the cancellations, and Alitalia workers blocked traffic outside the airport.

About 200 Alitalia employees including pilots in uniform also protested outside the Labour ministry where the talks were being held. Many held banners or had nooses around their neck to show their anger at plans to cut jobs and salaries.

"This is the Italian consortium for employees," said one sign attached to a noose worn by a worker.

Under the government-sponsored rescue plan, CAI will take over Alitalia's flight operations while the rest -- such as its troubled ground services and cargo units -- are to be sold off or liquidated.

In a concession to unions, CAI executive Rocco Sabelli said the group was willing to take a stake in the company managing Alitalia's heavy maintenance and cargo units, a union source present at the meeting said.

Alitalia filed for bankruptcy last month, felled by stiff competition from low-cost carriers, high fuel prices, inefficiencies and political interference.

Shares of the state-controlled airline have been suspended since June, when it was worth 617 million euros ($859.3 million) on the market.