Etihad and Alitalia: the partnership details

Hogan: “The sexiest airline in Europe should be Alitalia”

Etihad Airways and Alitalia have finally secured a partnership. But since regulatory approval is still needed, industry analysts at CAPA predict that protectionist voices will become louder. A more competitive Italian market is now likely. Meanwhile, Gabriele Del Torchio, Alitalia’s chief executive, says he is ready to leave the airline.

Alitalia is set to become the eighth airline in Etihad’s Equity Alliance. Under the agreement, Etihad will invest €560 million in Alitalia for a 49% stake. This will create a €1.8 billion investment deal for the deeply troubled Alitalia.

“The future is secure,” Etihad CEO James Hogan said in Rome. Although he added, “There’s no quick fix”, a three-year restructuring plan foresees Alitalia posting a €100 million profit by the end of 2017. Alitalia will rebrand within nine months from now, exit loss-making short-haul routes and bring in long-haul links from Rome and Milan to destinations like China via Abu Dhabi. Etihad wants Rome to become a bigger intercontinental hub. Alitalia’s SkyTeam membership will continue, Hogan said.

The new Alitalia brand should convey Italy’s reputation for food, fashion, luxury, culture, history, creativity and innovation, Hogan said: “The sexiest airline in Europe should be Alitalia.”

Etihad will buy into Alitalia’s frequent flyer program and conduct a sale-and-leaseback agreement for London Heathrow slots. However, controversial matters like redundancies were not given.