ROME (AP) – Fast-growing Etihad Airways took effective control of Italy’s loss-making national carrier Alitalia on Friday, injecting 560 million euros ($750 million) in a deal that will see the Gulf airline gain access to one of Europe’s major markets.
Etihad, which is buying a 49 percent stake in the Rome-based carrier, said Friday it will restructure Alitalia and even laid out the hope of returning it to profitability by 2017. The overall 1.76 billion-euro deal also involves 598 million of debt restructuring and 300 million from Alitalia’s wide array of smaller shareholders.
Etihad Airways CEO James Hogan announced the three-year plan to completely reboot the Alitalia brand at a press conference, saying it was a strong airline but “a poor business financially” that needed to be turned around.
“If we didn’t believe Alitalia could restructure and win we wouldn’t be here,” he said alongside his Alitalia counterpart, Gabriele Del Torchio. “The sexiest airline in Europe should be Alitalia.”
The two signed the deal making Etihad the single largest shareholder in Alitalia after months of negotiations over debt restructuring, proposed job cuts and other issues that sparked fierce opposition from Italian unions. Airline workers have staged wildcat strikes at Rome’s main airport this week to protest the deal.