The Italian national carrier Alitalia yesterday came closer to securing trade union acceptance of its rescue plan after ground personnel joined pilots in agreeing to job cuts and new, stricter work contracts.

After non-stop negotiations that lasted almost until dawn, management clinched a deal with union officials under which 2,500 ground staff will lose their jobs and the 6,500 still in employment will accept limits on salaries and social security payments.

Alitalia estimated that the agreement would save it €150 million between now and 2006, and said it wanted final approval for its rescue plan by next Monday, when its board of directors is scheduled to meet.

That would enable it to gain access to a €400 million, European Commission-approved loan, without which Alitalia says it cannot continue flying operations beyond September 30th.

Talks continued yesterday between the company and its flight attendants, the only staff category not yet to have signed new work contracts.

Although Alitalia said on September 6 that it wanted to shed 1,050 of its 4,700 flight attendants, the deals struck with pilots and ground staff indicated that some compromise was possible.

Italy's union leaders made clear that they expected a quid pro quo from the company and government in the form of financial assistance for laid-off workers and, more importantly, assurances over Alitalia's future structure. - (Financial Times Service)