ROME // The struggling Italian carrier Alitalia pledged to return to profitability by 2017 as it works to add new routes, cut costs and boost its image.
In a joint press conference in Rome with Etihad Airways, which holds a 49 per cent stake in the airline, the Alitalia chief executive Silvano Cassano said it would focus on its long-haul routes to North and South America and also use Abu Dhabi as a hub to fly to Asia.
“We are confirming our commitment to long-haul. Historically Alitalia is strong in North America and South America,” said Mr Cassano.
“But the great development will be east Asia. We need to fill the gap where Alitalia has been historically weak, because it takes financial resources to buy long- haul planes.”
Mr Cassano said that the alliance with Etihad would give Alitalia access to Beijing, Shanghai, Seoul, and Tokyo.
In August, Etihad injected €387.5 million (Dh1.64 billion) to acquire a 49 per cent stake in Alitalia in deal worth more than €1.7bn. Under the deal, Alitalia is expected to make profit of about €108m in 2017.
Alitalia approached Etihad in 2013 after its major shareholders, including Air France-KLM, refused to provide more capital and reduced their holding to 7 per cent from 20 per cent.
Over the past three years, Etihad has been acquiring equity stakes in carriers around the world to boost its connectivity. Currently it owns stakes in eight airlines including Germany’s airberlin and Air Serbia.
“We are taking advantage of the relationship with airberlin to recapture the business in the north of Europe and fight our competitors,” said Mr Cassano.
Alitalia, which has suffered decades of losses and multiple bailouts from governments, also faces tough competition from low cost carriers and the development of high-speed rail in Europe.
The airline underwent a complete change to its management and some former Etihad executives have come onboard.
Etihad’s chief executive James Hogan has joined Alitalia as vice chairman. Also, Duncan Naysmith of Etihad has become the new chief financial officer. John Shepley was appointed the head of strategy, and Aubrey Tiedt, the former head of Etihad’s guest services, is now handling Alitalia’s customer service.
“We have the financial resources. My management team is a mix of Italians and experienced executives coming from Etihad…it is up to us now to make it happen,” said Mr Cassano.
selgazzar@thenational.ae
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