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Alitalia CEO says job cuts from Etihad tie-up 2,200: report

MILAN (Reuters) - The head of Alitalia expects around 2,200 jobs to go under a planned tie-up with Gulf carrier Etihad Airways, he was quoted as saying by La Repubblica newspaper on Sunday.

"Etihad is inflexible on this (job cuts)," Gabriele Del Torchio was quoted as saying.

Alitalia and Etihad have been in talks since December, but a deal has so far proved elusive due to Italy's reluctance to bow to Etihad's demands for job cuts and a restructuring of the Italian airline's debt.

Italy's Labour Minister Giuliano Poletti said last week job cuts could be as high as 2,500 and Alitalia management is due to meet trade unions on Thursday.

La Repubblica reported Del Torchio as saying Etihad had asked the creditor banks to write off 30 percent of the airline's debt and convert the rest into equity.

"I don't think there are big problems on the horizon on this one," he was quoted as saying.

Etihad still needs to secure an agreement with Alitalia's creditors led by Italy's two biggest banks, Intesa Sanpaolo and UniCredit, on how to restructure around 700 million euros ($953 million) of debt.

Italian media over the weekend reported UniCredit's chief executive Federico Ghizzoni as saying Etihad's requests were hard to meet but he was confident a deal could be reached.

Del Torchio said in a separate interview in Il Messaggero on Sunday that he hoped a preliminary "document" for a deal with Etihad could be drawn up at an Alitalia board meeting on Friday.

Asked when a final deal might be reached he said: "In July, I hope, with the signing of the contract."

Del Torchio said Alitalia's current controlling shareholder group CAI would hold a stake of 51-55 percent in the new Alitalia created after the deal. Etihad would have 45-49 percent.

All pending legal cases involving the Italian airline would end up in an "Old Alitalia" vehicle, he said.

With Alitalia expected to run out of cash by August, sources familiar with the matter have said the company, the Italian government and unions have little choice but to accept a deal on Etihad's terms.

($1=0.7345 euros)

(Reporting by Stephen Jewkes; Editing by Greg Mahlich)

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