Etihad eyes stake in Alitalia: report
12 Dec 2013
Abu Dhabi's national carrier Etihad Airways is looking to acquire a stake in troubled Italian airliner Alitalia to expand its share of global air traffic and make Abu Dhabi a global aviation hub in the process.
Etihad is reported to be currently examining Alitalia's books and is expected to decide on whether to take a stake or not before the year-end.
Alitalia is a private group, of which 75 per cent of the ownership is held by leading Italian business groups and financial institutions, with the remaining 25 per cent held by Air France-KLM, the largest European airline.
The group operates with the brands Alitalia, with a wide range of premium services on domestic, international and intercontinental routes, and Air One, specialised in quality low-cost flights to domestic and international destinations.
Alitalia, which currently provides service to a network of 83 destinations, transported 24.275 million passengers in 2012.
But the fourth-largest airline in Europe, which has accumulated debt of more than 800 million euros and continues to make daily losses of 700,000 euros, needs a partner willing to invest in its fleet and make it profitable in the longer term.
Alitalia, a member of the SkyTeam alliance, operates from the Leonardo Da Vinci airport base in Roma Fiumicino that is also the SkyTeam alliance's South Europe hub.
Alitalia also operates cargo services, transporting freight and mail in the holds of its aircraft through a dedicated cargo office.
While Etihad and Alitalia made no comments on the issue, analysts expect Etihad to be looking to acquire at least 25 per cent, so as to have enough management and strategic influence.
Etihad, which is a non-European carrier, can only take a maximum stake of 49 per cent in Alitalia.
Etihad recently bought a third of Switzerland's Darwin airline and a good portion of their fleet serves destinations in Northern Italy.
Cash-rich Etihad, whose annual net profit tripled in 2012, already holds stakes in Virgin Australia, Air Berlin, Aer Lingus and India's Jet Airways among others.
The UAE carrier has been aggressively growing its international network over the past 10 years through minority stake purchases and codeshare agreements, as it competes with regional rivals Emirates Airline L and Qatar Airways.
Alitalia, meanwhile, raised €300 million ($413 million) to keep itself flying for the next six months while it searches for an investor.
Alitalia, which was rescued and privatised in 2008, last month presented a revised industrial plan wherein its management promised severe cost cuts of up to €300 million to make the carrier more profitable.