Alitalia will lay off more than 2,000 remaining workers as the closure approaches

ROME (AP) – Italy’s former national carrier Alitalia has begun layoff procedures for 2,059 of its workers, its management told unions.

The move comes as Alitalia’s successor, ITA Airways, faces setbacks in its plans to merge with Germany’s Lufthansa.

According to Italian media reports, merger talks have stalled after the Italian Ministry of Economy rejected Lufthansa’s proposals to fix the price of a 41% stake in ITA Airways.

Lufthansa argues that the state-owned Italian airline will lose value due to its poor performance in the fourth quarter of the year.

Lufthansa said it would comply with the terms of the 2023 contract for its investment in ITA, adding that it had “signed the necessary remedy package by the agreed deadline.”

Meanwhile, Alitalia, which is under special administration and is heading for final liquidation, plans to lay off its remaining staff by the end of the year.

The final cuts include more than 1,100 flight attendants and 82 pilots and will take effect in January, according to a letter sent last week by management to the airline’s union.