The airline aims to cut costs by 1.0 billion euros ($1.07 billion) and increase revenue by 30 percent in that time, according to the plan adopted after more than six hours of boardroom talks.
Alitalia did not lay out possible job cuts but Italian media have speculated that between 2,000 and 3,000 jobs could be slashed.
The company said only that the plan was “subject to Alitalia's trade unions agreeing to a new collective works agreement and headcount-related measures.”
The business plan contains “radical and necessary measures across the whole of the company to stabilize it and secure its long-term sustainability,” the firm said in a statement.
Also included in the strategy are new offers on short and medium-haul routes, on which Alitalia has suffered from cut-throat competition from low-cost airlines such as easyJet.
Alitalia has been making losses for years and even a huge capital injection in 2014 by Emirati airline Etihad had failed to stem the tide.
The company had previously targeted a return to the black in 2017 but its losses amounted to 460 million euros last year and were expected to be several hundred million euros this year.