Etihad set to seal Alitalia investment deal
Rome, August 7, 2014
Loss-making Italian airline Alitalia will seal its tie-up with Gulf carrier Etihad on Friday, the government said, a deal that comes as the country's flagship airline was on the brink of bankruptcy and that protects more than 10,000 jobs.
After a final meeting between government officials and the chief executive of the Abu Dhabi carrier James Hogan on Thursday morning, Transport Minister Maurizio Lupi announced an agreement that followed several months of negotiations.
The deal foresees Etihad taking a 49 percent stake in Alitalia and investing 1.2 billion euros ($1.6 billion) in the airline over the next three years, said Lupi, who hailed the tie-up as a major boost for Italy's struggling economy, which has slipped back into its third recession in six years.
"This is a very important signal, with all that's been said about Italy on its knees and in recession," he told reporters. "This is a great business alliance with great investments planned for the future."
For Etihad, the deal will open up Europe's fourth-largest travel market and extend its reach in Europe, where it already has stakes in Air Berlin and Ireland's Aer Lingus.
Lupi said an industrial plan foresees Alitalia breaking even by 2017 and becoming profitable thereafter, creating jobs and reviving Italy's airport system.
Under the agreement, existing Alitalia shareholders, including post office operator Poste Italiane will group their holdings in a new so-called "mid-company" that will control 51 percent of shares in the restructured airline.
A 300-million-euro capital increase was sealed earlier this month to ensure the airline's immediate funding needs are covered.
Rival airlines have expressed concern that the deal could amount to illegal state aid but Lupi said Rome was confident that European authorities would not pose any problems.
"We have followed all the European Union's requirements. In September we will present a document in which we will explain step by step how the Alitalia affair has been managed," Lupi said at a press conference in Rome.
The majority of the trade unions representing Alitalia workers have given the green light to jobs cuts of about 1,635 out of a workforce of some 12,800, less than the 2,250 requested by Etihad.
But a wildcat strike among baggage handlers at Rome's Fiumicino airport on Wednesday highlighted the potential opposition from workers once the job cuts start to take effect. - Reuters