Etihad Says Open to 'Potentially Deepening' Ties With AlitaliaBy , , , and
Alitalia was declared insolvent by Italy Tribunal in May
Italian carrier seeking buyer as part of bankruptcy process
“Strong ties continue to exist between Alitalia and Etihad Aviation Group and we remain open to exploring all options to maintain and potentially deepen those ties for mutual benefit,” an Etihad spokesperson told Bloomberg when asked about Alitalia’s bankruptcy sale process.
Alitalia, which was declared insolvent May 11 after losing 205 million euros in the first two months of the year, has started an administration process aimed at finding investors willing to invest in the carrier. About 30 airlines and private equity firms submitted non-binding expressions of interest in the Alitalia sale process, according to financial daily Il Sole 24 Ore. The carriers may include Delta Air Lines Inc., Air France-KLM Group and Etihad, while TPG and Cerberus are among the private equity firms, the newspaper said.
The Italian airline has about 3 billion euros in debt and assets worth 921 million euros. Investors can submit bids for the entire company, assets or propose a restructuring plan, according to the Alitalia tender document. Etihad, which cut off funds to the carrier after workers rejected a restructuring plan, failed to turn around Alitalia after buying a 49 percent stake in 2014.
Delta said it “continues to monitor Alitalia’s progress since it entered into the administration process,” without commenting on details. The U.S. carrier is a long-standing partner of Alitalia as part of its trans-Atlantic joint venture with Air France-KLM.
“We are not buying Alitalia,” Lufthansa Chief Executive Officer Carsten Spohr said in Cancun. “But Italy is a very important market for us. It’s an important market for long-range services especially inbound. We will be watching very carefully if opportunities do arise.”
The administration process of Italy’s flag carrier may provide an “opportunity” for Lufthansa to expands its low-cost arm Eurowings in the country, Spohr said, adding that the German airline “will look at” picking up Alitalia assets such as aircraft and slots if they come up for sale.
Alitalia commissioners are preparing an 18-month business plan that will be submitted by the end of July. Alitalia had no comment on the matter.
— With assistance by Richard Weiss, and Benjamin D Katz