Etihad acquires 49 per cent of Alitalia

Etihad Airways will own 49 per cent of Alitalia, following the approval of a 1.76 billion-euro, or $2.4 billion U.S., plan to rebuild the Italian airline as a profitable business.

A total 560 million-euro investment by Etihad will see the Abu Dhabi-based company acquire 49 per cent of Alitalia's shares (valued at 387.5 million-euro), as well as a 75 per cent interest in Alitalia Loyalty Spa (which operates MilleMiglia, the airline’s frequent flier program) for 112.5 million-euro. Additionally, Etihad will also purchase five pairs of slots at London’s Heathrow airport for 60 million-euro.

Etihad’s investment will be complemented by a further equity investment of 300 million-euro from existing core Alitalia shareholders, as well as up to 598 million-euro in financial restructuring of short and medium term debt has been provided by financial institutions and existing bank shareholders. Three hundred million-euro of new loan facilities have also been extended by Italian financial institutions.

According to a press release, the restructuring will also provide Alitalia with the opportunity for long-haul flying from both Rome Fiumicino and Milan Malpensa. This will include flights to new destinations, increased frequency in certain existing markets and provide Alitalia’s passengers access to Etihad Airways’ global network.

Photo (L-R): Etihad Airways Chief Financial Officer James Rigney, Alitalia Chairman Roberto Colaninno, Etihad Airways President and Chief Executive Officer James Hogan, and Alitalia Chief Executive Officer Gabriele Del Torchio mark the official signing of the investment deal in Rome, Italy. (Courtesy of Etihad Airways)