Italian Premier Paolo Gentiloni, left, and Italian Labour Minister Giuliano Poletti talk during a press conference at Chigi Palace in Rome, Italy, Friday, April 14, 2017. Gentiloni urged Alitalia workers on Friday to approve a compromise deal to relaunch Italy's struggling flagship airline that was reached in last-ditch, government-mediated negotiations between unions and Alitalia management. (Giuseppe Lami/ANSA via AP)

ROME - Premier Paolo Gentiloni urged Alitalia workers on Friday to approve a compromise deal to relaunch Italy's struggling flagship airline that was reached in last-ditch, government-mediated negotiations between unions and Alitalia management.

The deal reached early Friday reduces proposed job and salary cuts and calls for greater investment in the long-range routes that analysts say are critical for Alitalia's survival. It's to be put to a referendum of Alitalia workers next week.

At a news conference Friday, Gentiloni said the negotiations were difficult but that it was in the government's interest to push through a deal.

"I hope it's confirmed by the workers," he said. "Alitalia is a private company but the government hasn't spared any effort to find an agreed-upon turnaround plan."

Alitalia was taken over nearly three years ago by Etihad Airlines, which infused cash and a new business plan into an airline that was losing a reported 2 million euros a day. Alitalia had been run by an all-Italian consortium led by banks Unicredit and Intesa Sanpaolo, which still retains a 51 per cent stake although Etihad runs the airline.

In March, Alitalia's board approved an initial business plan that foresaw layoffs of more than 2,000 ground personnel and salary cuts of flight personnel by 25 to 35 per cent. The 1 billion euros ($1.07 billion) in cost-cutting measures over three years had been aimed at helping the airline better compete with low-cost carriers that have captured nearly half of the Italian market.

The agreement reached early Friday trims the number of ground crew to be cut to 980 and caps the salary cut at 8 per cent, the ANSA news agency reported. Alitalia employs 12,500 people worldwide. The agreement also calls for new long-range flights to boost revenue.

"After months of negotiations, we were able to reach a verbal agreement overnight that reduces the work and economic sacrifices, even though the overall burden will be significant," said Carmello Barbagallo of the UIL union.

Alitalia's Luigi Gubitosi said great progress had been made. After the deal was presented to Alitalia's board Friday, he said: "We didn't get everything we wanted, but from our point of view we did everything possible and above all we respected the deadline," ANSA reported.

News from © The Associated Press, 2017