By Andy Sambidge
Abu Dhabi airline to send letter detailing conditions for equity investment in struggling Italian carrier
Etihad Airways on Sunday said it has moved closer to completing a proposed equity investment in Alitalia.
The Abu Dhabi-based airline confirmed that it will forward a letter to Alitalia detailing the conditions and the criteria for the investment, the latest twist in months of negotiations.
Upon confirmation by the board of Alitalia and its stakeholders of their acceptance of these terms, the airlines will proceed to final documentation in order to complete the proposed transaction, in line with EU and other regulatory requirements, Etihad said in a statement.
James Hogan, president and CEO of Etihad Airways, said: “We are delighted to be able to move forward with this process and look forward to the successful conclusion of the proposed transaction with Alitalia.
“An equity investment in Alitalia will be beneficial not only for both airlines, but, more importantly, it will give more choice and broader travel opportunities to business and leisure travellers into and out of Italy."
Gabriele Del Torchio, CEO of Alitalia, said: “This is an excellent outcome for Alitalia. This investment will provide financial stability and confirms Alitalia's key strategic role as an infrastructure player in the travel and tourism industry in Italy for long-term growth."
Roberto Colaninno, president of Alitalia, added: "We are delighted to move forward with Etihad Airways providing Alitalia with an ideal strategic partner enhancing the Company's long term growth perspectives".
No details about the extent of the investment by Etihad have been disclosed but previous reports suggest it could invest more than €500m ($681m) in exchange for a 49 percent stake in the Rome-based airline.
A tie-up with the Gulf carrier could bring Alitalia the money it needs to invest in a new strategy focused on long-haul routes to counter its struggles to compete against low-cost airlines and high-speed trains on domestic and regional flights.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.