Italy govt appeals to Alitalia unions over Air France

By Alessia Pe and Valentina Za

BRDO, Slovenia (Reuters) - The Italian government urged Alitalia's unions to signal within the next two days that they are willing to soften their line with Air France-KLM, after the collapse in talks to buy the ailing Italian airline.

The Franco-Dutch carrier walked out of negotiations with Alitalia's unions to buy the state's 49.9 stake in Italy's largest airline, saying requests by labour leaders were unacceptable.

"My appeal (to unions) is to do something new today, or tomorrow at the latest," Economy Minister Tommaso Padoa-Schioppa told a reporters in Solovenia, after a meeting of the European Union finance ministers.

Air France-KLM's board meets on Monday, and the Italian government said it hoped the Franco-Dutch carrier would not completely write off the takeover of Alitalia, which the officials believe offer the airline its best chance of survival.

"I hope Air France-KLM won't shut the door for good," Enrico Letta, a senior adviser to Prime Minister Romano Prodi, told reporters in the northern Italian lakeside town of Cernobbio.

"And this of course hinges on the unions showing a responsible attitude."

JOB CUTS PLANNED