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The board of loss-making Italian Alitalia has given the green light to a tie-up proposal with Etihad Airways.

The UAE carrier has been negotiating for months to buy up to 49% of the Italian flag carrier, which is facing bankruptcy.

Alitalia chief executive Gabriele Del Torchio, quoted by Italian news agency ANSA, said after Friday's talks that negotiations with banks on Alitalia's debt burden were "continuing in the right direction".

"It takes time, since it involves a large sum. But everyone clearly wants to reach a solution with Etihad."

Talks have previously stumbled over Alitalia's heavy debt load and forecast cuts to some 2,200 jobs, out of a total of 12,800, as part of the deal.

Fresh talks between Alitalia management and unions over jobs are set for today (Monday), Italian media reported.

Italian transport minister Maurizio Lupi warned last week that negotiations would have to be wrapped up by mid-July on the tie-up with Etihad, which he said was prepared to invest up to €1.25 billion in Ali