Advertisement

Alitalia rescue seen as Etihad signals interest

AFP
AFP - [email protected]
Alitalia rescue seen as Etihad signals interest
Etihad is thought to be preparing an investment of between €300m and €350m. Photo: Kentaro IEMOTO/Flickr

A rescue for Italian flag carrier Alitalia inched forward on Thursday as the state postal service said it was taking part in a capital increase and Emirati airline Etihad Airways signalled its interest.

Advertisement

"Etihad Airways is in discussions with Alitalia," spokesman Tom Clarke said.

The Abu Dhabi-based company could be preparing an investment of between €300 million and €350 million and could take a stake of up to 49 percent, Italian media reported.

That would make it by far the biggest shareholder.

Alitalia is in debt to the tune of €1.2 billion and has been badly hit by competition from low-cost carriers, particularly Ireland's Ryanair.

In October, shareholders gave unanimous approval for a capital increase of up to €300 million to save Alitalia from bankruptcy as unpaid debts for jet fuel threatened to ground its flights.

That operation concluded on Thursday with a decision by the postal service to contribute €75 million euros - a controversial move that critics say could be state aid.

Another €225 million in the capital increase have already been contributed by Alitalia's existing private sector investors and by banks.

French-Dutch carrier Air France-KLM, which had been the biggest shareholder with 25 percent, declined to take part in the operation and will now see its stake go down to around eight percent.

Transport Minister Maurizio Lupi made a last-ditch effort on Thursday to persuade Air France-KLM to invest in Alitalia saying it was the "main interlocutor".

Asked about Etihad's interest, he said there were "many expressions of interest on the part of major companies which would like a strategic alliance with Alitalia".

"Whether it is an alliance with Air China, Aeroflot or Etihad, there will be no overlap of their activities with Alitalia," he said.

"We are interested in strategic alliances with the Arab world or Asia because there is enormous compatibility," he said.

Several trade unions reacted positively to Etihad's interest after Alitalia management last week proposed a plan for 1,900 job cuts out of around 14,000 employees and budget cuts of 300 million euros.

"We need a new industrial partner with financial solidity and a structure that can maximise the potential of Alitalia," said Claudio Tarlazzi from the Uiltrasporti union.

"We believe Etihad's interest in a major stake of capital would be a solution for the future of the company," he said.

Giovanni Luciano from the Fit CISL union was also keen. "We see this possibility as a very important chance to shift from a context of profound difficulty to a relaunch," he said.

Etihad has been expanding, buying stakes in several smaller carriers around the world as it competes with larger Gulf rivals Emirates and Qatar Airways.

Etihad owns 29 percent of Air Berlin, 40 percent of Air Seychelles, 19.9 percent of Virgin Australia and three percent of Aer Lingus.

In November, India's Jet Airways said it had completed the sale of a 24-percent stake to Etihad after obtaining regulatory approvals.

Analysts said that, for airlines such as Etihad, part of India's allure is the chance to swell passenger traffic on routes to North America, Europe, the Middle East and other parts of the world.

Etihad also announced in mid-November that it was acquiring 33.3 percent of Swiss carrier Darwin Airline, which it plans to rebrand as Etihad Regional.

The acquisition is awaiting regulatory approval. Etihad is also due to acquire 49 percent of Air Serbia in January.

Don't miss a story about Italy - Join us on Facebook and Twitter.

More

Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also