Etihad Confident of Air Berlin, Alitalia Turnaround, Hogan Says

  • Etihad seeks more Italy-Germany route tie-ups for the carriers
  • Alitalia to decide on Air Malta stake purchase by end of June

Etihad Airways is confident that Air Berlin Plc and Alitalia SpA are making progress in their turnarounds as the Persian Gulf carrier seeks to stem losses at the European affiliates.

Etihad wants to strengthen ties between the Italian and German airlines’ route networks and cooperate in other areas to enable them to compete with mainline operators such as Deutsche Lufthansa AG and discount carriers including Ryanair Holdings Plc, Etihad Aviation Group Chief Executive Officer James Hogan told reporters Wednesday in Rome.

“We are halfway through the Alitalia restructuring process, which started less than two years ago,” Hogan said. “We are looking at cost synergies between Air Berlin and Alitalia and between Air Berlin and other airlines. But we are not integrating them.”

Etihad, the No. 3 airline in the Persian Gulf, has bought minority stakes in seven carriers from Australia to Europe to funnel passengers through its Abu Dhabi hub and share costs, and it has formed the aviation-group parent company as part of the process. While some of the partners such as Jet Airways (India) Ltd. and state-controlled Air Serbia have reached financial targets, Etihad has had to prop up others, including Air Berlin and Rome-based Alitalia. German newspaper Handelsblatt reported in February that Etihad was looking at merging parts of the two companies, with Air Berlin stock delisted.

Neighboring Gulf rival Qatar Airways Ltd. is also pursuing an investment strategy abroad, announcing on Tuesday an increase in its stake in British Airways owner IAG SA to 15 percent. The holding started at 9.99 percent in 2015.

Alitalia plans to invest 400 million euros ($451 million) in its business this year and is evaluating options to add more long-haul aircraft to its 98 narrow-body and 24 wide-body planes, according to a presentation on Wednesday. Of the total, 240 million euros will pay for fleet expansion and cabin interior refurbishment, Alitalia CEO Cramer Ball said. The Italian carrier expects by the end of June to decide whether to buy a 49 percent stake in government-owned Air Malta, Hogan said.

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