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Air France-KLM to propose new deal for Alitalia unions

Air France-KLM head Jean-Cyril Spinetta said on Tuesday he would submit new proposals to unions at struggling Italian airline Alitalia this week in an effort to get them to back his offer for the carrier.

Spinetta told union representatives at a meeting that he would "table a new accord on March 28," a company spokesman said.

The Air France-KLM chairman also confirmed his total commitment to the deal that will allow Alitalia, a chronic loss-maker, to return to profitability while making sure no one gets left behind, the spokesman said.

Spinetta met the unions earlier this month but failed to get their consent to his takeover plans, which involve some 2,100 job cuts, the break up of the AZ Servizi ground services operations and an end to cargo flights by 2010.

"An appropriate solution will be offered to each of the 2,100 employees concerned -- 1,600 in Alitalia and 500 in Alitalia Servizi," an Air France-KLM statement said after the meeting.

Earlier, a union source said Spinetta had expressed a willingness "to study the possible inclusion of the operations of AZ Servizi at Rome's Fiumicino airport."

He also raised the possibility that some 180 pilots from Alitalia's cargo division could be found new positions within the company before the freight service is closed down in 2010, the union source said.

Additionally, Air France-KLM would be open to continuing negotiations beyond Monday, provided Alitalia has enough funds to continue operating in the meantime, the source said.

Monday is the cut-off date for unions to respond formally to Air France-KLM's offer to buy the 49.9 percent state-owned stake in struggling Alitalia.

The talks on Tuesday come as Alitalia's fate has become caught up in Italian elections on April 13 and 14, with the outgoing government trying to get the deal done although a final decision will be down to the incoming administration.

Tipped to win the premiership for a third time at the polls, right-wing opposition leader Silvio Berlusconi has dismissed Air France-KLM's initial offer as "arrogant" and vowed to reject it -- if elected -- in favor of an Italian solution.

His threat prompted a rebuke from leftist Foreign Minister Massimo D'Alema.

"The fate of this company, which faces bankruptcy because there is no serious alternative to Air France, seems not to interest Berlusconi," D'Alema said.
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