Italy's state airline Alitalia has clinched a deal with its ground staff early today to roll back their benefits and open the way for some 2,500 job cuts.
The accord came two days after the Italian national carrier persuaded its pilots to work longer hours for less pay, leaving just the cabin crews holding out against new contract conditions that are seen as crucial to keeping the airline out of bankruptcy.
Alitalia said in a statement its agreement with groundstaff would save the company some €150 million and allow for 2,500 layoffs. The airline had originally demanded 3,500 job cuts from its army of ground workers.
The deal included a block on inflation-linked salary benefits, a two-year waiver of company payments to a social security fund, and new rules on days off.
Loss-making Alitalia had given itself until September 15th to finalise everything from large-scale job cuts to a plan to slice the company in two parts.
However, the deadline passed without drama, indicating that Chief Executive Mr Giancarlo Cimoli believes the company is on the right track to sort out its many problems.
With the firm set to run out of cash by the end of the month, Mr Cimoli needs to have a deal in hand by the time Alitalia's board meets on Monday so he can request access to a €400 million emergency loan.
So far the market has believed that state-controlled Alitalia will pull back from the brink of collapse, and the airline's shares have risen more than 30 per cent this week.