Etihad Discusses Alitalia Tie-Up After Snub by Air FranceRobert Wall
Etihad Airways PJSC said it’s in talks with Alitalia SpA, the ailing Italian airline that’s seeking a new international backer after existing shareholder Air France-KLM Group said it won’t inject fresh funds.
“Etihad Airways is in discussions with Alitalia,” the Abu Dhabi carrier said in a statement today. “We have no further comment at this time.”
Gaining the third-largest Mideast airline as an investor would support Alitalia’s efforts to repair finances hurt by years of losses and mounting competition from low-cost rivals. Etihad is considering a cash contribution of about 300 million euros ($410 million), people familiar with the talks have said.
Etihad Chief Executive Officer James Hogan has built a string of equity investment spanning Serbia to Australia, helping to funnel more traffic through its Gulf hub. The deals also let Etihad bundle purchases of aircraft and equipment.
The Italian government has been helping to broker a rescue package for Rome-based Alitalia. State-owned Poste Italiane SpA today approved a 75 million-euro contribution, while UniCredit SpA and Intesa Sanpaolo SpA, the country’s two biggest banks, will guarantee as much as 100 million euros toward a capital increase, plus a bridge-to-equity loan of the same value.
“I’m a satisfied by the formalization of Etihad interest in Alitalia,” Italian Transport Minister, Maurizio Lupi said in e-mailed statement today. “It shows government followed the right way. Having lost Air France it was possible for Alitalia to seek an important international partner.”
Air France-KLM, previously Alitalia’s largest single shareholder, said last month it wouldn’t subscribe to a new share offer as it focuses on internal turnaround efforts. The move will dilute a stake acquired in 2009 to 8 percent.
Etihad already holds stakes in Air Berlin Plc, Virgin Australia Holdings Ltd., Jet Airways India Ltd., Aer Lingus Group Plc, Air Serbia and Air Seychelles Ltd. as it seeks to feed the Abu Dhabi hub, and agreed last month to buy Darwin Airline SA of Switzerland and rebrand it as Etihad Regional.
Etihad and Air France last year signed a code-share agreement with plans to expand the ties. The Mideast carrier also today announced a code-share deal with Greece’s Aegean Airlines SA covering domestic and European routes, as well as some Etihad flights in Africa, the Gulf, and Australia.