(Euronews) Alitalia is making a last ditch effort to cut costs and raise money to stave off bankruptcy.

The board of the Italian airline is reportedly looking at a rescue plan that includes up to 2,000 layoffs and pay cuts. It meets on Wednesday to approve that new business plan.

It is hoping to persuade investors to put another 300 million euros into the company to keep it flying. It was carrying 813 million euros of debt at the end of September.

Air France-KLM is not likely to stump up more cash. It holds a 25 percent stake in Alitalia, but considers those shares are now worthless. It has said it would invest more only under “very strict conditions”.

Experts say Alitalia needs a strong partner willing to invest billions to shift its focus to the more lucrative long-distance market from domestic and regional routes.

The Italian government, which sees Alitalia as a strategic asset, has been holding out the prospect that another partner could be found – perhaps from Asia – to keep the airline flying if Air France-KLM walks away.

Potential candidates Etihad Airways, Lufthansa and Aeroflot have all distanced themselves for now.

“If Air France don’t (subscribe), their stake will fall to around seven percent and then we can look for a partner in South-East Asia,” Transport Minister Maurizio Lupi told journalists on Tuesday. He mentioned Aeroflot and Air China as possible investors, but did not provide details.

Despite becoming leaner since it was privatised, Alitalia has still been hit hard by competition from low-cost carriers and high-speed trains.

Since cutting more than a third of its workforce when it was privatised in 2008, Alitalia has added 1,200 positions, all on a permanent basis. Today it employs 14,000 people, with 90 percent on permanent contracts.

SOURCE EURONEWS