Etihad agrees to deal for 49% of Alitalia

Italy’s government and unions have little choice ahead

Etihad Airways says it has agreed principal terms and conditions to buy a 49% stake in Alitalia. The two airlines will now quickly finalise the deal, subject to regulatory approvals.

The board of the loss-making Italian carrier voted on June 13 to accept Etihad’s offer to invest in the airline, but further details were not given. Etihad is prepared to invest up to €1.25 billion over the next four years, Italy’s transport minister, Maurizio Lupi, says.

Talks between the two carriers have continued for more than six months. They have been so protracted partly due to Italy’s reluctance to accept Etihad’s condition of around 2,200 job cuts. But with Alitalia expected to run out of cash by August, Italy’s government and unions have little choice.