Amwal Al Ghad English - 2014-02-03 09:21:41
Etihad Airways PJSC, the third-largest Middle Eastern airline, will decide within 30 days whether to purchase a stake in ailing Italian carrier Alitalia SpA to extend its strategy of funneling traffic through Abu Dhabi.
Etihad has entered the final stage of due diligence on a possible investment in Alitalia SpA, it said in a statement today, citing Chief Executive Officer James Hogan and Alitalia counterpart Gabriele Del Torchio. The airlines and advisers are working on a joint strategy, according to the statement.
“From Alitalia’s perspective, this would definitely be a shot in the arm for a carrier that has struggled for a while now,” said Sidanth Rajagopal, a Dubai-based partner at Clyde & Co. “Getting the best practices of Etihad and the money will be good for the airline.”
Italy’s Prime Minister Enrico Letta is visiting the United Arab Emirates and will speak in a press conference in Abu Dhabi this evening, where he may address the talks. Etihad, which made a series of minority investments in carriers spanning Ireland to Australia as part of its growth strategy, said it was in talks with Alitalia, declining to give more details.
Any issues that may prevent establishing an appropriate business plan “will have to be resolved to ensure the plan can be implemented to move Alitalia to sustainable profitability,” the statement said.
Etihad is considering a cash contribution of about 300 million euros ($405 million) to unprofitable Alitalia, people familiar with the talks have said.
Air France, which owned 25 percent of Alitalia, late last year declined to invest further when Alitalia was seeking to raise funds, saying the Italian carrier hadn’t met its conditions. Air France (AF) declined to comment on Etihad’s announcement. More»