Operation Phoenix to save Alitalia from bankruptcy moves into its next stage this week when its prospective Italian owners start negotiations on selling a minority stake to either Air France-KLM or Lufthansa.

Agreement on new labour contracts and redundancies reached with the two pilots’ unions in the early hours of Saturday is expected to pave the way for an accord, possibly on Monday, with the last two unions representing flight assistants who are holding out for better conditions.

Pilots agreed to cut their salaries by 6-7 per cent and reduce their holidays from 42 days to 30 days. In return, the takeover consortium, Cai, agreed to reduce the number of lay-offs from 1,000 to 860 by taking on 140 pilots part-time. The consortium’s offer of some €400m ($584m) for Alitalia’s healthy assets is still being evaluated by Augusto Fantozzi, the lossmaking flag carrier’s special administrator, and independent advisers.

Under Operation Phoenix, drawn up by Intesa Sanpaolo – a bank that first advised Air One, then Alitalia and is a stakeholder in Cai – the break-up of the airline will leave all its debts of some €1.2bn.