Brief Update: Etihad-Alitalia Alliance


The EU Commission will make a final decision on the proposed 49% equity stake acquisition by Etihad in the struggling Italian national carrier, Alitalia. According to Reuters, the EU Commission may accept concessions from Etihad/Alitalia such as slots on Rome to Belgrade (Etihad has a stake in Air Serbia) and Rome-New York. In August, Abu Dhabi’s Etihad Airways acquired a 49 per cent stake in the Alitalia in return for a €560 million investment in an overall deal worth more than €1.75bn that will require a three-year restructuring exercise and rebranding of Alitalia. The rest of the refinancing package included €300m from core Alitalia shareholders, €598m through debt restructuring and another €300m in new loans from Italian banks.

Maurizio Lupi, the Italian minister of infrastructure and transport, emphasised that he saw “no obstacles” to the Etihad Airways and Alitalia alliance and expects it to be fully operational by January 1, 2015. One issue is whether Etihad has effective control of the airline despite its minority stake. EU rules do not allow majority ownership of EU carriers.  On this issue, Mr. Lupi stated: “It will be down to the actual shareholders to decide the board of directors, according to majority shareholders, the chairman of the board of directors will be chosen by the majority shareholders. He will be Italian obviously … having control”.


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