Etihad Airways has reportedly finished a due diligence for a possible 40 percent investment in Alitalia. Maurizio Lupi , the Italian transport minister told parliament on Wednesday that Etihad could present its industrial plan for the troubled Italian carrier to the government by the end of this week.
The Middle Eastern airline is apparently considering its options which a month ago its’ Chief Executive James Hogan said could swing either way. Etihad has said it will invest in the Italian carrier only if it fits in its network and if Alitalia has a credible plan to return to profit. If the two sides agree on the plan, an offer from Etihad could reportedly arrive in mid-May. In the meantime, Alitalia’s cash continues to drain at an unsustainable rate and it faces grounding its planes.
Alitalia has only been kept afloat with support from the government and Air France. Its 2013 rescue package was worth $US688 million. Disagreement over more cash injections saw Air France bow out of the race reducing its shareholding to just four per cent.
The biggest blocks for a possible investment are:
- Alitalis’s $US1.24 billion in debt to principally to Intesa Sanpaolo and UniCredit which Etihad wants written down
- Union concern at plans by Etihad to insist in a reduction in the 14 000 strong staff
- Lufthansa’s strident objections to the European Union
The question is what will happen to Alitalia and Air Berlin under Etihad influence:
- merger between the two?
- some combination of the two carrier’s international routes?
Will Air Berlin remain in One World or move across to Skyteam?