Etihad may buy shares in Alitalia - report

Abu Dhabi airline could buy shares after Alitalia pact with Air France-KLM expires

Abu Dhabi-based Etihad Airways, which has a codeshare agreement with Alitalia, would be willing to buy shares of certain minority shareholders in the Italian carrier, French business newspaper Les Echos reported, without identifying the source of its information.

Eithad would buy into the Italian carrier after a pact expires on January 12, as Air France-KLM, which has a 25 percent stake in Alitalia, does not have the financial capability to increase its share in the operator because of increased competition in the industry and lower profitability, the newspaper reported.

Etihad Airways, which competes with Dubai's Emirates Airline and Qatar Airways, has been expanding its network aggressively taking, up a 29 percent stake in airberlin, a 10 percent holding in Virgin Australia, 40 percent of Air Seychelles and 3 percent in Ireland's Aer Lingus.

Etihad is also vying to expand its operations in India and may be in the final stages of talks to buy part of either Jet Airways or grounded rival Kingfisher Airlines, an Indian government official said on December 17. Indian media reported Etihad is eyeing a 24 percent stake in Jet Airways. Both Indian airlines have confirmed that they have held talks with Etihad.

A deal would be the first since the Indian government relaxed ownership rules in September to allow foreign airlines to invest up to 49 percent in a domestic carrier.

Etihad has 41 codeshare agreements in total.

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