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Etihad investment in Alitalia approved by EC

17 Nov 2014 by GrahamSmith

Etihad Airways' 49 per cent stake in Alitalia has been approved by the European Commission.

The merger clearance means the Gulf carrier can now invest €560 million (£448 million) to save Alitalia from bankruptcy, as laid out in a deal signed in the summer (see news, August 8).

James Hogan, Etihad's president and CEO, said: "We are delighted to be able to move forward with this process and look forward to a positive outcome and the final conclusion of our transaction with Alitalia.

"An equity investment in Alitalia will be beneficial not only for the both airlines, but, more importantly, it will give more choice and broader travel opportunities to business and leisure travellers into and out of Italy."

Alitalia CEO Gabriele del Torchio added: "This is an excellent outcome for Alitalia. This investment will provide financial stability and a foundation for impressive long-term growth for the Company and for the travel and tourism industry in Italy, in which Alitalia is a fundamental player.

"The decision by the EU approves the largest ever foreign investment in Alitalia and demonstrates huge confidence in the future of the national carrier."

As part of its investment, Etihad has agreed to buy five pairs of slots at London Heathrow for €60 million (£48 million). These will be "leased back to Alitalia on an arm's length basis".

The plan is to grow Alitalia's long-haul network by flying from both Rome Fiumicino and Milan Malpensa, including flights to new destinations, increased frequencies and an enhanced network to Etihad's Abu Dhabi hub.

Etihad has also acquired a 75 per cent interest in Alitalia Loyalty Spa, which operates the airline's frequent flyer programme MilleMiglia.

MilleMiglia members will be able to "earn and burn on Etihad Airways and partner airlines, with future integration of the programmes planned".

Etihad has already taken a share of Air Berlin, Aer Lingus and Virgin Australia.

alitalia.com, etihad.com

Graham Smith

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