Alitalia took a step on Tuesday toward resolving the labor disputes that have threatened to push it into bankruptcy, agreeing to new contracts with its 2,300 pilots.
The pilots accepted a pay cut, 289 layoffs and 100 early retirements. Alitalia's management had been seeking to lay off 450 pilots.
The airline, which is 62 percent owned by the Italian government, has been close to bankruptcy for much of the year as it struggles to cut costs and compete with low-cost airlines like Ryanair and EasyJet. Last week, Alitalia presented the unions with a restructuring plan that called for 5,000 job cuts in the next two years and the splitting of the airlines' flight and ground operations into two companies.
The pilots represent only about a tenth of Alitalia's 21,000 work force, but the agreement is seen by both employees and the company as a crucial step toward avoiding bankruptcy and an eventual liquidation. On other occasions when Alitalia has faced labor unrest, agreements with the pilots' union led to accords with flight attendants, maintenance workers and check-in counter clerks.
In other recent negotiations between workers and airlines in financial distress, the pilots have set the tone for the other employees. The US Airways bankruptcy filing this week came after its pilots' union refused to vote on the company's proposal for wage and benefit cuts. Delta Air Lines is threatening to seek bankruptcy protection by the end of the month if pilots do not agree to US$1 billion in wage and benefit cuts.
Alitalia's stock surged 15 percent on Tuesday based on optimism that the carrier and the pilots would reach an accord.
The airline continued negotiating with flight attendants and other workers in an attempt to reach a settlement by Wednesday.
The pilots agreed to fly more often with shorter layovers. Combined with the layoffs, that change will save Alitalia 52 million euros (US$63.7 million) a year.
A spokesman for the National Association of Commercial Airline Pilots, which represents 1,000 Alitalia pilots, said the unions would hold talks with the government in the coming days in an attempt to receive some financial support from the state for those pilots who would lose their jobs.
The government has said it will release a state-guaranteed bank loan of 400 million euros that gives Alitalia the cash it needs to get through its financial crisis, but only if the carrier and all of its unions reach an agreement by yesterday.
While a spokesman for Alitalia said that the company still planned to conclude negotiations by then, his counterpart at the National Association of Commercial Pilots said the deadline could be pushed back a few days.
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