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Alitalia may cut up to 2,600 staff to cut costs: union sources

An Alitalia worker walks near an Alitalia auto check-in machine at Fiumicino airport in Rome October 11, 2013. REUTERS/Tony Gentile

By Alberto Sisto

ROME (Reuters) - Alitalia may cut up to 2,600 jobs in its first mass lay-offs since the airline was privatized, union sources said on Monday, citing a restructuring plan the company approved last week to cut costs and keep its planes in the air.

"The numbers in the restructuring plan talk about 2,500-2,600 job cuts - 1,300 are fixed-term contracts and then there is talk of 220 pilots, 400 cabin staff and 600-700 ground staff," one of the sources told Reuters.

Italy's unions have said they were gearing up for a battle should job cuts at the airline compound the situation for workers already struggling in a grim economic environment.

The response would be "very, very hard", Susanna Camusso, head of the CGIL union, said in a radio interview last week.

More than a third of its staff were laid off when the company was privatized five years ago.

Alitalia remains a political hot potato for the fragile coalition government of Enrico Letta, and any tough restructuring of the ailing flag carrier to suit a foreign investor would rankle.

An Alitalia spokeswoman said the revised industrial plan only mentioned cost cuts and did not specifically refer to any redundancies at this stage.

Another union source said a meeting with unions was expected on Thursday or Friday.

The restructuring plan, which sources said would target cost savings of between 200-400 million euros ($270-541 million), failed to convince top shareholder Air France-KLM (AF.PA), which said the proposed measures were not radical enough to cut Alitalia's debt.

The French-Dutch group decided to walk away from a 300 million euro capital increase and allow its 25 percent stake to be diluted to just 7 percent, leaving Alitalia in need of another strategic partner, since the cash call is only seen as a temporary reprieve.

However, a concrete alternative partner to Air France-KLM has yet to emerge since potential candidates Etihad Airways, Lufthansa (LHA.DE) and Aeroflot (AFLT.ME) have all distanced themselves from the Italian airline for now.

($1 = 0.7394 euros)

(Writing by Agnieszka Flak; editing by Tom Pfeiffer)