Etihad Airways, Alitalia Close to Investment Deal
Etihad Airways is close to acquiring a major stake in Alitalia, Italy’s troubled flag carrier. The two airlines, which have been in negotiations since last year, announced Sunday that they are in the final phase of due diligence in putting the deal together
The two airlines have set a deadline of 30 days to complete the transaction and will use the period to “determine how a common strategy can be developed which meets the objectives of both parties.”
Abu Dhabi-based Etihad will reportedly take a 49% stake in the troubled Italian airline. It has made similar investments seven airlines including Air Berlin, Air Serbia, Darwin Airline, and Aer Lingus.
“Any issues that may prevent the establishment of an appropriate business plan will have to be resolved to ensure the plan can be implemented to move Alitalia to sustainable profitability,” the airlines said in a joint statement.
Alitalia has been seeking funding since Air France-KLM, which owns a stake in the airline, declined to participate in a €300 million round of fundraising last year. Air France-KLM’s two airlines are members of SkyTeam along with Alitalia. Its stake in Alitalia dropped to 7.1% from 25% after declining to participate. The Italian government, which bailed out Alitalia six years ago with a €300 loan in June 2008, is not anxious to do it again. The move was protested by six European carriers, British Airways, Finnair, Iberia, SAS, Tap Portugal, and Virgin Atlantic as having contravened EU competition and state aid rules.
(Photo: Accura Media Group)