Talks have broken off between unions representing Alitalia employees and Air France-KLM, which wants to buy the near-bankrupt Italian airline.
The unions rejected plans by the European aviation giant to slash 1,600 jobs from Alitalia's 11,000-strong work force.
"The Air France-KLM group is not here to buy Alitalia but to see if it is possible, with the personnel of Alitalia, to take part in the creation of a major group with a global reach," Air France-KLM boss Jean-Cyril Spinetta Spinetta told union leaders.
"With your contribution, Alitalia will be able to restore its profitability," Spinetta said, as criticism swirled over the conditions set by Air France-KLM for the takeover.
The French-Dutch company requires the unions' green light by March 31 for the deal to go through.
Spinetta reportedly warned earlier that his company could walk away from the deal, accepted Monday by the Italian government. The Italian state owns 49.9 percent of Alitalia.
"We are certainly not obliged to acquire Alitalia," Spinetta said.
Italy's outgoing center-left government on Monday approved the acquisition through a share swap of one Air France-KLM share for every 160 Alitalia shares.
The result would value the Italian airline at US$219.44 million.
Delta, United cut flights to fight fuel cost
Delta Air Lines and United Airlines have unrolled new plans to cope with surging fuel costs, and some other airlines said they are also implementing ways to cut costs and add revenue.
In a comprehensive plan, Delta said it would offer buyouts to more than half its employees, making substantial reductions in domestic flights while adding to international routes.
Skyrocketing fuel prices are threatening airlines' ability to stay in the black this year, with the cost of jet fuel up 30 percent just in the past month. Not only is crude oil trading at more than US$100 per barrel, but the crack spread, which is the surcharge to make jet fuel, has shot up to $30 per barrel.
Passenger traffic remains strong, but revenue increases aren't keeping up with high costs and airlines are waiting for the other shoe to drop as the US economy weakens.
Ed Bastian, chief financial officer, said the airline would cut domestic flight capacity by five percent by August, in addition to a previous plan for a five percent cut this year. Cutbacks include grounding 15-to-20 mainline aircraft and 20-to-25 regional planes, all older aircraft which burn too much fuel. The planes will either be sold or returned to lessors.
With the reduced schedule, Delta will eliminate at least 2,000 jobs - including 1,300 frontline positions - through attrition and buyouts being offered to nearly 30,000 of Delta's approximately 55,000 workers.
Jake Brace, chief financial officer, of United said the carrier would retire 15 to 20 older aircraft from its fleet this year.
United has hedged 20 percent of its fuel needs this year, and Delta is 25 percent hedged. Southwest Airlines, long the industry leader in fuel hedging, has about 70 percent of this year's fuel requirements hedged.
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