Airline Darwinism: Eithad, Alitalia reach breakthrough in negotiations
But the prospect of large job cuts at Alitalia and the airline’s debt of at least €800 million have been major hurdles in the talks.
Click here to add Abu Dhabi as an alert
Disable alert for Abu Dhabi,
Click here to add Abu Dhabi Government as an alert
Disable alert for Abu Dhabi Government,
Click here to add Air Serbia as an alert
Disable alert for Air Serbia,
Click here to add Alitalia as an alert
Disable alert for Alitalia,
Click here to add Darwin Airline as an alert
Disable alert for Darwin Airline,
Click here to add Etihad Airways as an alert
Disable alert for Etihad Airways,
Click here to add European Union as an alert
Disable alert for European Union,
Click here to add Gabriele Del Torchio as an alert
Disable alert for Gabriele Del Torchio,
Click here to add Italian government as an alert
Disable alert for Italian government,
Click here to add James Hogan as an alert
Disable alert for James Hogan,
Click here to add Jet Airways as an alert
Disable alert for Jet Airways,
Click here to add Roberto Colaninno as an alert
Disable alert for Roberto Colaninno,
Click here to add Virgin Australia as an alert
Disable alert for Virgin Australia
The airline confirmed that it would forward a letter to Alitalia detailing the conditions and the criteria for the equity investment.
Etihad Airways on Sunday said it is pressing ahead with a plan for an equity investment in the struggling Italian carrier Alitalia.
The airline, which has been in negotiations with the loss-making Italian carrier for almost a year, confirmed that it would forward a letter to Alitalia detailing the conditions and the criteria for the equity investment.
“The Italian government appreciates the strategic importance of this transaction and looks favourably at the Etihad Airways — Alitalia partnership,” the Abu Dhabi based carrier said in a statement.
Upon confirmation by the Board of Alitalia and its stakeholders of their acceptance of these terms, the airlines will proceed to final documentation in order to complete the proposed transaction, in line with EU and other regulatory requirements, Etihad said.
The statement, however, did not disclose details of the proposed transaction and the size of the stake.
“We are delighted to be able to move forward with this process and look forward to the successful conclusion of the proposed transaction with Alitalia,” said James Hogan, president and chief executive officer of Etihad Airways.
Hogan said an equity investment in Alitalia would be beneficial not only for the both airlines, but, “more importantly, it will give more choice and broader travel opportunities to business and leisure travellers into and out of Italy.”
Describing the deal as an excellent outcome for Alitalia, Gabriele Del Torchio, chief executive officer of Alitalia, said the investment would provide financial stability and confirms Alitalia’s key strategic role as an infrastructure player in the travel and tourism industry in Italy for long-term growth.
Roberto Colaninno, president of Alitalia, said: “We are delighted to move forward with Etihad Airways providing Alitalia with an ideal strategic partner enhancing the Company’s long term growth perspectives.”
Etihad, one of the fastest growing airlines in the world, has been holding talks with Alitalia since the start of the year. But the prospect of large job cuts at Alitalia and the airline’s debt of at least €800 million have been major hurdles in the talks. The struggling Italian carrier was kept afloat by a government-engineered €500 million-rescue package in 2013. The latest acquisition move by Etihad comes in the wake of it increasing its stake in Virgin Australia to more than 21 per cent last month.
Founded in 2003, the Abu Dhabi government-owned airline has been building up a network of minority stakes in airlines across the world to accelerate its growth,.
Currently Etihad also has holdings in airberlin, Air Lingus, and Air Serbia and Jet Airways of India. It is seeking regulatory approval to invest in Swiss regional carrier Darwin Airline.
- Nip, tuck: Dubai's grand plans for being a major player in medical tourism
- Zain, UNHCR, Facebook to bring free internet access to urban refugees in Jordan
- Yemen Central Bank headquarters to relocate from Sanaa to Aden
- IMF report details the crippling economic effects of conflict in MENA
- Start Up Lebanon entrepreneurs head to Silicon Valley Roadshow