Alitalia 'to cut 3,000 jobs' in survival attempt

Alitalia's biggest unions today clinched a framework agreement designed to save Italy's largest airline from liquidation, but more talks remained and flights risked being grounded for a lack of cash to pay for fuel.

Italy's four main union confederations - CGIL, CISL, UIL and UGL - agreed during overnight talks with the government and a business consortium offering to buy the carrier to the rough outline of a rescue plan that includes job cuts.

Alitaliawill cut about 3,000 jobs under a new framework agreement reached overnight with Italy's four main union confederations, Labour Minister Maurizio Sacconi said.

Raffaele Bonanni of the CISL union, said: "It's a first, important step."

But it was not clear if Alitalia's other five unions would agree to the deal being negotiated by their peers. Talks on tricky issues like salary cuts were set to resume at 11 a.m. (0900 GMT), with no guarantee of success.

Italy's civil aviation authority said over the weekend Alitalia's operating licence was at risk after the airline confirmed it was having trouble buying jet fuel from wary suppliers.

The chief executive of ENI, Paolo Scaroni, said the Italian oil company would not provide Alitalia fuel without cash upfront.

"Not even if Berlusconi or the Pope ask me to," Scaroni told La Repubblica daily. "(ENI) cannot supply fuel to airlines if they cannot pay cash. There is no moral suasion - international agreements are clear."

Once a symbol of Italy's post-war boom, Alitalia has for years suffered from political interference, labour disputes, financial woes and most recently from soaring the fuel costs which are weighing on airlines around the world.

The airline, which is operating under a bankruptcy commissioner, has not been in profit since 1999 and had nearly 1.2 billion euros ($1.7 billion) in debt as of July.

An Alitalia collapse would be a huge political blow for Prime Minister Silvio Berlusconi who promised voters he would use his business contacts to find it an Italian buyer.

Britain's third largest package holiday operator, XL Leisure Group, grounded all flights on Friday after going into administration. Discount transatlantic carrier Zoom Airlines began bankruptcy proceedings last month.

In April, Alitalia's unions sank a deal agreed under the previous centre-left government to sell the airline to Air France-KLM, a deal that Berlusconi, then in opposition, said he would block if he came into power.

The state holds a 49.9 percent stake in the airline and its publicly trade shares have been suspended since June.