Etihad Airways has outlined the final steps required for it to seal the acquisition of a 49 per cent stake in Alitalia.
The steps will require a matter of months, the airline said.
In an emailed statement yesterday, Etihad said the remaining steps are: completing the transaction documents; finalising of the conditions precedent; applying for regulatory approval; and final shareholder and board approvals.
Since late last year, Etihad and Alitalia have been in talks towards a deal.
James Hogan, Etihad's president and chief executive, told The National in Los Angeles this month that Etihad wants thousands of job cuts at loss-making Alitalia – just as it did when it took equity stakes in Air Serbia and Air Seychelles.
Mr Hogan declined to say how many jobs might be lost at Alitalia. The Italian airline’s chief executive, Gabriele Del Torchio, is reported to have put the figure at 2,200 of the carrier’s 14,000 staff.
“On the face of it, the hurdles left to overcome look very straightforward. Although it’s worth remembering that deals can and do have obstacles when they aren’t expected,” said Saj Ahmad, the chief analyst at StrategicAero Research.
“The EU is the biggest headache. They may stifle or nix this deal – regardless of what Etihad and Alitalia present as a price for equity infusion. That would kill Alitalia off for sure in the long run and there’s no guarantee Etihad would make a second attempt.”
The European Commission and some European carriers, including Lufthansa, are strongly opposed to an Etihad-Alitalia deal. They say it represents unfair competition.
Alitalia last year received a €500 million (Dh2.5 billion) government-facilitated rescue package. The airline, which is losing €1.5m a day and is in debt to the tune of €1billion, risks running out of cash by August if a partner cannot be found.
Under Mr Hogan’s management, Etihad’s strategy has been to expand its network via codeshares and equity alliances. Last year, Etihad grew its equity alliance to seven carriers – Aer Lingus, airberlin, Air Serbia, Air Seychelles, Virgin Australia, India’s Jet Airways and Switzerland’s Etihad Regional, which was formerly known as Darwin Airline.
The Alitalia deal would be Etihad’s most significant investment to date. Etihad expects traffic flow to Italy from the Philippines and Australasia. The Philippines as a Catholic country would be sending pilgrims to Italy. Demand will also come from China, India and the Arabian Gulf states, according to Mr Hogan.
selgazzar@thenational.ae
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