The Belgian airline, Sabena - which is half-owned by Swissair - is reported to have agreed on a restructuring plan that will cost 2,000 jobs over the next few years, according to media reports.
The Belgian newspaper, Le Soir, said that the company's board approved the programme on Monday night. Union leaders reacted angrily to the reports saying they would organise demonstrations in front of Sabena's headquarters near Brussels airport.
Sabena said it would not comment on the reports until it had informed its 12,000 strong workforce of the plan. A news conference is planned for Thursday.
Swissair has a 49.5 per cent stake in the airline and recently re-negotiated an agreement that would have seen it increase its stake to 85 per cent once a transport agreement with the European Union was ratified.
Swissair's chairman, Mario Corti, argued that the poor financial position of the company made it impossible for Swissair to increase its stake in the loss-making Belgian carrier. Swissair itself has embarked on a major business overhaul after posting losses of SFr2.9 billion last year.
After bitter negotiations with the Belgian state, which owns the rest of Sabena, Swissair agreed to contribute to a further investment of SFr645 million. In return, it has been released from its commitment to increase its holding. Belgium has also dropped the threat of legal action.
As well as the job cuts, Sabena's restructuring plan is said to involve cancelling two long-haul and six European destinations, and cutting its fleet of 79 planes by 15 to 20 aircraft. Eventually, reports say it intends to replace its whole fleet with smaller planes.
Some of the details of the restructuring plans were already released in July, including the sale of its catering, hotel and cargo businesses.
In its 40 years history, Sabena has only once made a significant profit.
swissinfo with agencies