Alitalia expected to accept Etihad tie-up today

Move may be last attempt to save the loss-making airline

Alitalia is expected to give a green light today to a deal with Etihad Airways. The decision is likely to be made at a board meeting, in a final attempt to save the heavily loss-making airline. A tie-up would probably see job cuts of up to 2,500.

Alitalia has been a loss-maker for much of its 68-year history. It was privatised in 2008. A state-organised €500 million rescue package in 2013 has kept it afloat in recent months. Alitalia is expected to run out of cash by August.

Etihad, which already has stakes in Air Berlin and Aer Lingus, is considering an investment of more than €500 million in Alitalia in exchange for a 49% stake. That would give it more of a foothold in Europe, the news agency Reuters reports.

Etihad-Alitalia talks have been ongoing since December. It is mainly Italy’s reluctance to accept Etihad’s strict conditions over restructuring and job cuts that has stopped a deal from happening until now.