Italian Prime Minister Silvio Berlusconi said a "big foreign company" was in talks to forge an alliance with troubled national carrier Alitalia without specifying further, GN reported.
Berlusconi is under pressure from unions and the opposition to salvage Alitalia after his rhetoric on an Italian rescue helped scupper a deal with Air France-KLM. Media reports have said the government would now prefer an alliance with Lufthansa
Italian news agency AGI said the German carrier was in position to become an investor with a 20 per cent to 25 per cent stake in a reshaped Alitalia.
"We are in talks with a big foreign company for an alliance on an international level, exactly the opposite of the hypothesis of the fire sale to Air France-KLM, which the previous government wanted, which among other things, included 7,000 job cuts," Berlusconi told Italian television.
Air France-KLM planned 2,100 jobs cuts at Alitalia and more redundancies at its ground service unit as part of a takeover that fell apart over union resistance and criticism from Berlusconi, who was then campaigning for the April election.
Berlusconi has come under attack from the opposition and unions over reports the latest plans for Alitalia could entail 5,000 job cuts - far more than those in the French deal.
"We already have the industrial plan, we have the investors, we have the needed capital," Berlusconi said.
"There will be job cuts for sure. We'll try to keep them to a minimum, but the choice is between 20,000 people being fired or a number much smaller than that."
Italy has tasked adviser Intesa Sanpaolo with drawing up a new rescue plan, which is expected to suggest putting Alitalia under special administration and then splitting off its healthy parts for new investors and seeking an international alliance.
Lufthansa, which Italian media speculate could top the list for such an alliance, has said the Italian market remains important for it, but that Alitalia needed restructuring.