All nine Alitalia employee unions have signed up to the airline's new business plan, clearing the way for the struggling carrier's flight operations to be split from its other activities. The agreement also calls for the Italian treasury to reduce its holding to 30%, from the current 62%.

The deal enables Alitalia to receive a desperately needed €400 million ($490 million) government bridging loan.

Alitalia managing director Giancarlo Cimoli has persuaded pilots, cabin crew and ground staff to accept wage cuts and longer working hours - an unprecedented achievement at an Italian company. Alitalia pilots will fly a maximum of 900h a year, up from 770h, and 289 cockpit positions will be eliminated. Across the airline, employee numbers will be cut by 3,700, resulting in labour savings of €280 million ($340 million) over the next two years. The airline had been on course to run out of cash at the end of September.

Cimoli plans to split Alitalia's flight operations from its ground activities, forming stand-alone companies AZ Fly and AZ Service, respectively.

Source: Flight International