Alitalia unions attack Air France-KLM concessions

By Alberto Sisto and Deepa Babington

ROME (Reuters) - Air France-KLM agreed on Friday to take on an extra 12 percent of Alitalia's ground service workers, but unions fighting its bid for the ailing Italian carrier rejected the concession as inadequate.

Air France-KLM (AIRF.PA: Quote, Profile, Research), also battling resistance from Italian politicians and Milan's airport operator, has said it will scrap the deal without union support. The takeover is considered one of Alitalia's (AZPIa.MI: Quote, Profile, Research) last hopes of averting bankruptcy.

Alitalia said after a board meeting on Friday that it was considering extending the talks beyond a March 31 deadline it and Air France-KLM had set for winning over the unions and overcoming other hurdles hampering the deal.

The airline, which loses more than one million euros a day, said in a statement that it had obtained 148 million euros ($233.3 million) of extra liquidity in view of a possible "limited" extension of the talks. The extra money is the result of tax reimbursements and the sale of Air France-KLM shares.

After an initial stalemate in negotiations with the unions, Air France-KLM unveiled plans on Friday to hire about 900 more employees of Alitalia's troubled ground services unit, according to a document seen by Reuters.

Air France-KLM would now retain 4,191 of about 7,400 employees at Alitalia's AZ Servizi ground services unit, compared with 3,300 in an earlier draft. But it is sticking to its plan to cut 500 positions at AZ Servizi and reduce Alitalia's 51 percent stake in the unit.

In a joint statement, all major Alitalia unions except one criticized the offer as changing little, but said they would not boycott talks with the two carriers on Monday.

"We're going to the negotiating table because it's our duty to seek a solution, but we want a negotiation, not a surrender," said Roberto Panella, head of the Ugl Trasporti union.