Etihad + Alitalia - Mange må gå i Alitalia

Etihad To Acquire 49-Percent Share of Alitalia

AIN AIR TRANSPORT PERSPECTIVE » AUGUST 11, 2014

by  BILL CAREY

From left to right, Etihad CFO James Rigney, Alitalia chairman Roberto Colaninno, Etihad CEO James Hogan and Alitalia CEO Gabriele Del Torchio celebrate agreement. (Photo: Etihad Airways)

August 8, 2014, 12:38 PM

Abu Dhabi carrier Etihad Airways and Alitalia signed an investment agreement on Friday that will see Etihad acquire a 49-percent stake in the troubled Italian flagship airline. The overall “transaction implementation agreement,” which the airlines valued at €1.76 billion ($2.35 billion), will recapitalize Alitalia with the aim of restoring it to profitability by 2017. 

Under the agreement, which the European Commission must approve, Etihad will invest €560 million ($750 million), including €387.5 million for the equity stake in Alitalia, €112.5 million to acquire a 75-percent interest in the airline’s frequent-flier program and €60 million to acquire five slot pairs at London Heathrow Airport, which it will lease back “at arm’s length” to Alitalia.

Existing Alitalia shareholders will invest another €300 million in the carrier. Financial institutions and bank shareholders have agreed to restructure €598 million in short- and medium-term debt and extend Alitalia a €300 million credit line. “This is a unique opportunity for Alitalia to restructure and win,” Etihad CEO James Hogan said during a press conference held in Rome to announce the agreement. “Overnight, the financial position of Alitalia changes.”

The airlines began negotiating the deal in August last year, months after Gabriele Del Torchio took over as CEO of Alitalia, which has been losing money for years. “My objective was to secure the airline, to give a solid future to Alitalia,” he said via a translator. “In the meantime, market conditions have changed. Internationalization has become overwhelming, [and] what appeared to be a protected domestic market has become an open market. It became clear to us that the only way to tackle the future successfully…was to find an international alliance.”

Alitalia also announced that it had “reached unanimity” with its trade unions on Friday to support the transaction, which, to conform with Etihad’s planned reforms, will involve layoffs. “I would like to thank all the people who unfortunately will have to leave Alitalia,” Del Torchio said. “We are very sorry about that, but we are aware that in order to create a future of development and opportunity sometimes painful decisions are necessary.”

Alitalia and Etihad combined will serve 211 destinations, operating 232 aircraft. State-owned Etihad has also acquired equity stakes in Air Berlin, Aer Lingus, Virgin Australia and India’s Jet Airways. “When we negotiate with Boeing, with Airbus, with Rolls-Royce it’s about scale,” Hogan said. “We go to the table as one…That is a major advantage the [airline] alliances haven’t been able to achieve.”