Alitalia, the beleaguered Italian national carrier has finally done its deal with Etihad.
The 8th of August was the day where AZ’s management probably made a sigh of relief as Etihad Airways finalized the agreement between both carriers which allegedly means a total investment
of a €1,758 million in order to rebuild Alitalia into a competitive and profitable business.
Alitalia has become Etihad boss James Hogan’s latest prey / sources: AZ - EY
A hell of an investment!
Not all of course coming from Etihad.
They will provide €560mn by means of a complicated mix of equity investment, asset purchases and some other means of funding.
On top of this, existing shareholders will push in a further €300mn with financial institutions shouldering €598mn by means of a restructure of the carrier’s medium and short term debt. The same
financial houses are said to also be prepared to inject another €300mn in the form of new loan facilities.
Wow! - money seems to be no object!
But will this all work?
All one hears so far on the cargo side is that Etihad plans investments in the Milan Malpensa cargo facilities in order that Etihad-Alitalia can use MXP as an extended cargo hub. How much they will invest and what systems will be revamped, is still an open question.
Fact is that Etihad now finally gets its desired 49 holding in Alitalia, so one can only assume that they plan to get the cargo side in order as well.
Etihad Airways CEO, James Hogan, stated that “for Etihad Airways, this is a strategic long-term commercial investment. On completion, we are committed, with the other shareholders to build a
revigorated Alitalia as a competitive, sustainable and profitable business that can operate successfully in the global air travel market.”
Again, no specific mention of cargo.
It seems that the emphasis is on a profitable extension of long-haul passenger routes from Rome and Milan with connection to Etihad’s Abu Dhabi network.
Makes sense as far as Etihad is concerned.
How Alitalia will eventually benefit from this, remains to be seen.
Etihad is still said to have an interest in the Martinair product and if discussions between them and Air France / KLM are still going on, then maybe we’ll see a cargo tie-up there.
John Mc Donagh
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