Etihad Airways, the national carrier of the UAE, completed an investment deal with Alitalia as part of a plan to save the Italian national carrier and bring it back to profitability.
Under the terms of the agreement, Etihad is investing 560 million euros ($745 million) in Alitalia, purchasing a 49 share of the company.
Core Alitalia shareholders have also committed an additional $400 million investment in the turnaround strategy. The package also includes $800 million in debt restructuring and $400 million more in loans from Italian financial institutions. The total investment in the turnaround strategy is more than $2.3 billion
The plan also includes the addition of new long-haul routes from Rome and Milan to Abu Dhabi and beyond, signifying network consolidation with Etihad routes.
The plan is intended to bring the carrier back to profitability by 2017.
James Hogan, president and CEO of Etihad Airways, said, “For Etihad Airways, this is a strategic, long-term commercial investment. On completion, we are committed, with the other shareholders, to build a reinvigorated Alitalia as a competitive, sustainable and profitable business that can operate successfully in the global air travel market.
“We believe in Alitalia. It is great brand with enormous potential. With the right level of capitalization and a strong, strategic business plan, we have confidence the airline can be turned around and repositioned as a premium global airline once again.”
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