It Looks Like it’s Going to Happen

The long awaited decision on whether Etihad will buy into financially stricken Alitalia seems to have come about.


Etihad Airways confirmed on June 1, that it will forward a letter which details the conditions precedent for a proposed equity investment in Alitalia.
The negotiations between both carriers have been going on for months with many ups and downs and uncertainty as to whether Etihad would buy in or whether their demands on Alitalia would be turned down by the AZ management and unions.

It is said that the Italian government is fully in favor of an Etihad-Alitalia partnership.
Once the Alitalia Board and shareholders confirm their acceptance of the terms laid out, both carriers will go ahead with final documentation and complete the transaction.
This is in line with EU regulatory requirements.

James Hogan, Etihad’s CEO is quoted as saying “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.” He further states that “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 travelers into and out of Italy.

But, what about the cargo transport in and out of Italy?
Is AZ’s cargo product going to be fully integrated into EY’s network with AZ playing just a “feeder role?”
No word of that in the yesterday made statements.

Alitalia’s CEO, Gabriele Del Torchio, joins Hogan in the manifestations by adding that “this is an excellent outcome for Alitalia. This investment will provide financial stability and confirm Alitalia’s key strategic role as an infrastructure player in the travel and tourism industry in Italy for long term growth.
Again, no word on cargo!

“Financial stability” - we certainly hope so, although the EY investment in Air Berlin has so far not led to financial peace for the stricken German carrier. Etihad has had to bail them out a few times since takeover.
And - what of the AF/KL participation? Must it now end or are they going to join up with EY?

It seems however the deal will go through, barring any unforeseen circumstances or massive union protests. These don’t seem to be an issue either at the moment.
Remains to be seen how Etihad will come to terms in the long term with the Alitalia culture.

John Mc Donagh

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