The European Commission (EC) has approved a joint proposal between Etihad and Alitalia for the Gulf carrier to acquire up to 49 per cent stake in Italy's national airline. The plan was announced earlier this year (see story).
The transaction will see the creation of a new joint venture called New Alitalia, and Etihad will also acquire sole control over Alitalia Loyalty.
The EC looked into Etihad's equity investments in other airlines such as Airberlin, Darwin Airline and Jet Airways, to see if its stake in Alitalia would create unfair competition. It was later concluded that the only concern was on the Rome-Belgrade route, since the Abu Dhabi-based airline also owns 49 per cent of Air Serbia.
To address this issue, Alitalia and Etihad have committed to releasing up to two daily slot pairs at Rome-Fiumicino and Belgrade airports to one or more inew entrants, with sweeteners such as the possibility of acquiring grandfathering rights as well as a special prorate agreement, a fare combinability agreement, an interline agreement and frequent flyer programme reciprocation.
The EC eventually confirmed that the partnership complies with the its regulations on competition.
This is certainly good news for Alitalia, which has been in the red for hundreds of millions of euros for many years. The new partnership will see some 560 million euros (US$750 million) injected into its coffer. For Etihad, the move is in line with its ongoing strategy to expand its global presence through equity partnerships.
In a press statement, Gabriele del Torchio, chief executive of Alitalia, said: “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.
“Today’s decision by the EU approves the largest ever foreign investment in Alitalia and demonstrates huge confidence in the future of the national carrier.”
Visit etihad.com and alitalia.com
Reggie Ho
