Air France sets tough terms for Alitalia: report

[MILAN] Air France-KLM has set tough conditions, including 5,000 job cuts, for investing more money in loss-making Italian airline Alitalia, financial daily Il Sole 24 Ore reported on Sunday.

In an unsourced report, the Italian newspaper said that Air France-KLM, which is Alitalia's biggest shareholder with a 25 per cent stake, had dictated its conditions to Italian Transport Minister Maurizio Lupi "around 10 days ago". The paper said that the two sides were locked in a tug-of-war.

Air France-KLM's conditions, it said, included the removal of Alitalia's board of directors and a restructuring of its debts of nearly one billion euros (S$1.68 billion) to reduce them by 70 to 80 per cent.