Abu Dhabi-based Etihad Airways said on Sunday it would invest in Alitalia if a number of conditions are met. The declaration ends months of negotiations over the future of the Italian airline, which is almost bankrupt. Etihad chairman and chief executive James Hogan did not disclose the of the deal but said the investment would be beneficial to both companies.
Launched 10 years ago, Etihad has rapidly expanded across the world and now has stakes in seven airlines from Australia to Ireland. Negotiations for the purchase of up to 49% of Alitalia were stalled because Etihad demanded that the Italian company further reduce labor costs and restructure its debt.
Gabriele Del Torchio, CEO of Alitalia, said the investment will give "financial stability" to the company. Alitalia didn't go bankrupt in December only because it received an injection of 300 million euros from its shareholders and 200 million euros in credit lines.
The deal is likely to be scrutinized by the European Union, which is concerned about minority stakes in European airlines being bought by foreign companies.
