Etihad puts in offer for struggling Italian carrier Alitalia
▶ The Abu Dhabi carrier is one of about 10 airlines that have made a non-binding offer for a total or partial takeover of the troubled Italian carrier
Etihad Airways said yesterday that it had put in an offer for ailing Italian airline Alitalia.
The Abu Dhabi flagship carrier was one of about 10 that made non-binding offers to acquire a full or partial stake in the troubled operator.
Another bid was placed by Irish budget operator Ryanair.
Etihad has a 49 per cent stake in Alitalia, but the future of that interest seemed shaky about three months ago when the Italian airline’s staff vetoed a €2 billion (Dh8.57bn) recapitalisation deal.
Etihad’s interest does not necessarily mean it wished to acquire the operator as a going concern, said John Strickland, of JLS Consulting.
“Airlines may well bid on a defensive basis to obtain information as part of the process and to stake a claim to the parts they may be interested in,” Mr Strickland said. “It is not likely any airline would have any interest in the entirety of Alitalia as it stands today, with its legacy of challenges.”
Etihad bought its stake in the Italian carrier in 2014, with the intention of making it profitable by this year.
But competition from lowcost airlines, such as Ryanair, meant passenger numbers continued to fall.
The poor performance by Alitalia, and other subsidiaries including Air Berlin, led Etihad to a complete review of its international investment strategy late last year.
Alitalia was put up for sale in May to avoid its liquidation.
Etihad Airways has emerged as one of about 10 bidders interested in acquiring a partial or full stake in the Italian airline Alitalia, suggesting the Abu Dhabi-based carrier remains committed to its investment in the troubled airline.
The non-binding bid, submitted ahead of a deadline on Friday, suggests that Etihad may not be ready to reverse course on its international investment strategy, despite last week selling off its stake in Switzerland’s Darwin Airline following a strategic review launched last year.
This weekend Etihad was named in the Italian press as one the airlines that had submitted a non-binding offer for total or partial takeover of Alitalia, alongside the Irish lowcost carrier Ryanair.
A source with knowledge of the proceedings confirmed to
The National that Etihad was one of the bidders.
“Strong ties continue to exist between Alitalia and Etihad Aviation Group and we remain open to exploring all options to maintain and potentially deepen those ties for mutual benefit,” an Etihad spokesman told
The National yesterday, giving no further details.
Three months ago, Etihad appeared ready to walk away from its 49 per cent stake in Alitalia, after the Italian carrier was put into administration following a €2 billion (Dh8.56bn) recapitalisation deal that was vetoed by Alitalia employees.
“Without the support of all stakeholders for that restructuring, we aren’t prepared to continue to invest,” said Etihad’s then chief executive James Hogan.
The expression of interest by Etihad and others does not necessarily equate to a desire to take the airline on as a going concern, according to John Strickland, an aviation analyst at JLS Consulting.
“Airlines may well bid on a defensive basis to obtain information as part of the process and to stake a claim to the parts they may be interested in,” Mr Strickland said. “It is not likely that any airline would have any interest in the entirety of Alitalia as it stands today with its legacy of challenges.”
Eithad acquired a 49 per cent stake in Alitalia in 2014, with a view to making the airline profitable again by 2017. But the airline’s passenger numbers continued to fall amid stiff competition from low-cost carriers including Ryanair.
The Italian government put the airline up for sale in May, in a bid to avert its liquidation.
The poor performance of Alitalia, alongside other subsidiaries including Air Berlin, led Etihad to launch a review of its international investment strategy late last year.
Mr Hogan, widely seen as the pioneer of that strategy, left the airline earlier this month.
Last month Etihad walked away from negotiations with German tourism operator Tui Group over a joint venture between the company’s Tui Fly airline and Air Berlin subsidiary Niki, in a sign that its international acquisition strategy had changed.
That shift seemed to be confirmed by the carrier’s sale of Darwin Airline, which it had re-branded as Etihad Regional.
Kevin Knight, Etihad Aviation Group’s chief of strategy, described the sale as “a result of the ongoing strategic review of our investments”.