Last year, Alitalia was about to go under (read more here) before Italian government found local investors to pump more money to the ever bleeding airline.
Now, Etihad has agreed to take 49% stake on the airline and take majority stake on Alitalia’s loyalty program MilleMiglia.
You can access Etihad’s web page for current Alitalia partnership here.
Etihad will create a new company for Alitalia’s operating assets that will shield the company from pending legal cases. According to Italy’s transportation minister, Etihad has agreed to invest up to 1.25 billion euros to the airline in the next four years.
Etihad already has stakes on Virgin Australia, Air Lingus, Airberlin and number of smaller airlines.
Here’s more information from the Bloomber’s article:
Alitalia SpA and Etihad Airways PJSC agreed the terms of a stake purchase giving the Middle Eastern airline 49 percent of the unprofitable Italian carrier and access to one of Europe’s biggest travel markets.
The two airlines will complete final documents, they said today. Etihad will invest about 560 million euros ($762 million) and create a company for Alitalia’s operating assets, said two people familiar with the matter. The carrier will pay about 400 million euros for the stake and will also buy a majority in the company that runs Alitalia loyalty program, said the people, who asked not to be named as the talks is private.
“It’s clearer and clearer that this marriage has to be done as it is an important industrial investment,” Italian Transport Minister Maurizio Lupi said in a statement. “We will meet unions to discuss job cuts.”
Alitalia had sought a new partner after Air France-KLM (AF) Group bowed out of a rescue brokered by the government last year. The airline has been unprofitable for years and is in the process of cutting thousands of jobs as its domestic market comes increasingly under attack from low-cost airliners and global carriers including Emirates, which services Milan.
It is very interesting to see if Etihad is able turn the Aitalia round that has been bleeding money forever or is it going to be yet another failed attempt. Etihad is taking over the Aitalia’s loyalty program as it did with Airberlin but likely will continue to run it separate from Etihad Guest.
Let’s hope that Etihad knows what it is doing. The Airberlin has continued to struggle after Etihad bought stake on it.
Seems that Etihad is building an alliance around the airlines that it holds a stake in. Airberlin belongs to Oneworld while Alitalia is a Skyteam members. I guess that this is overall good news for Etihad Guest members that undoubtedly will receive greater benefits when flying on Alitalia.