Etihad Airways has confirmed that it will acquire a 49 per cent equity stake in Alitalia.
Both carriers have agreed on principal terms regarding the proposed investment, and will now move to finalise the transactional documents. The deal is subject to final regulatory approvals.
Alitalia has faced numerous financial difficulties over its 68-year history. Since being privatised in 2008, the Skyteam member has reported consecutive years of loss.
Etihad’s stake in the company would represent a significant boost to Alitalia and may turn its fortunes around. According to RTE News, the Gulf carrier is prepared to invest up to €1.25 billion (US$1.70 billion) over the next four years.
The move is consistent with Etihad's long-standing strategy of using codeshares and equity investments as a means to increase its market share. The carrier already holds minority stakes in Air Berlin, Aer Lingus, Virgin Australia and Jet Airways.
Earlier this month there were rumours circulating about Etihad possibly investing in Malaysia Airlines, its codeshare partner, but the Gulf carrier has since denied those reports in a released statement.