Alitalia – Etihad Airways Partnership Deal is Finalized

Alitalia - Etihad Airways Partnership Deal is Finalized Alitalia has agreed, last week on Wednesday (June 25), to a rescue deal with Etihad, the national airline of the United Arab Emirates, for a reported €560m. Following months of negotiations, the Italian operator’s board has accepted the offer from Etihad to invest. The two airlines decided that Etihad would take 49 percent equity stake in Alitalia. The contract gives Alitalia a financial lifeline, as it was expected to run out of money by August. Etihad agreed it would invest 1.25 billion euros over the next four years in Alitalia.

Alitalia Chief Executive, Gabriele Del Torchio, believes that “this is an excellent outcome for Alitalia […] as an infrastructure player in the travel and tourism industry in Italy for long-term growth.” Although the deal still needs regulatory approval before it can go ahead, this partnership between the airlines will offer both concrete growth prospects.

Italy’s Transport Minister Maurizio Lupi, in a statement about the investment, declared that he “looks favorably” at Etihad’s terms, as it allows Italy’s main airline, Alitalia, to make “decisive steps forward” to regain stability. In addition, the agreement gives more choice to air travelers into and out of Italy.

For Alitalia the deal is a chance to finally get out of debt; whereas, for Abu Dhabi’s state-owned Etihad Airways, it is an opportunity to expand its global reach and be part of Europe’s biggest travel markets.

This financial deal agreed upon marks a rescue package that will reverse Alitalia’s troubled fortunes and would now provide monetary stability for the airline. Today, the airlines is moving to finalize the transactional documents that will include the agreed upon conditions that will complete the deal.

After Air France-KLM Group bowed out of a previous rescue attempt, Etihad will add Alitalia to its growing “equity alliance” of airlines. Etihad Airways Chief James Hogan explained that the investment in Alitalia S.p.A, hopes to shore up Alitalia’s finances and prevent its shutdown by launching the company now more decidedly as an international carrier.

 

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