Etihad pushes to agree Alitalia deal this month: CEO

Etihad Airways chief James Hogan said on Wednesday he aimed to complete negotiations on buying 49 per cent of Alitalia by the end of the month but stressed the company had to be "right-sized" first.

"We're all focussed on the end of this month. With our agreement, more time is allowed but our focus is the end of the month," Hogan said during a visit to Italy, where he was launching a new Etihad route between Abu Dhabi and Rome.

"We are in the final stages of the negotiations. We do need to right-size the airline," he said, as Alitalia management continued talks with unions for around 1,600 job cuts.

"We don't step into these negotiations unless we're convinced the airline will move to profitability.

"If we complete, we'll complete with the right foundation. The key issue is getting the cost base right," he said.

Alitalia "needs to be re-energised and brought back alive," he continued, adding: "A re-energised Alitalia could be one of the most successful airlines in Europe but to achieve that we have to have the right starting point."

Alitalia said it had agreed a job cuts plan with unions representing 80 per cent of the workforce although Italy's biggest trade union, the CGIL, has not given its go-ahead.

It has also negotiated a deal with current stakeholders to renegotiate Alitalia's debt of about 565 million euros ($765 million).

Asked about the future role for Air France-KLM, an existing shareholder, Hogan said: "Air France and KLM and Delta are all very important partners. We expect that relationship to continue."

The Emirates national carrier -- based in Abu Dhabi -- is planning to buy a 49-per cent stake in the debt-laden Italian flag carrier, which currently employs 12,800 people.

Etihad's initial investment is expected to be around 560 million euros ($762 million), and 660 million euros more has been mooted in future to develop the airline.

Etihad has expanded hugely since it was founded in 2003 and now has stakes in India's Jet Airways, Air Serbia, Air Seychelles, Aer Lingus and Air Berlin.

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Etihad rescues crippled Alitalia with deal to take 49%

Emirates airline Etihad Airways tied up a deal to rescue debt-laden carrier Alitalia on Wednesday by taking 49.0 percent of the Italian company.

The two groups gave no details of the value of the deal or of any conditions, but two key issues are huge debt and overstaffing at Alitalia which has lurched from crisis to crisis for years.

The deal, concluding tough negotiations which began at the end of last year, means that Etihad Airways is in effect rescuing Alitalia, playing a role which Air France once considered but then dropped because of the scale of the problems.

The agreement also marks a big step in the rise of Etihad Airways a young and rapidly growing company, which becomes a key shareholder in one of the old names of European aviation, and increases its reach into European markets and global routes.

Alitalia is now in the hands of private shareholders, but has its roots in the days when most European countries had their own state-owned airlines.

In recent years it has lurched from crisis to crisis, skirting bankruptcy, and beset by restructuring efforts and conflicts with staff.

The debt and staff cuts are believed to have been central sticking points in the negotiations.

Alitalia employs 12,800 and it is believed that about 2,200 jobs will have to be axed.

Etihad Airways has expanded rapidly in recent years, largely on a rise of air travel in the Gulf region of the Middle East.

In a joint statement, which provided no details, the two airlines said they had agreed the "terms and conditions of a proposed transaction whereby Etihad Airways will acquire a 49 percent equity stake in Alitalia."

They said they would tie up the deal as soon as possible subject to approval from regulators.

The chief executive at Alitalia, Gabriele del Torchio, said early in June that Alitalia would have to face a "complex, exhausting and painful" restructuring, but that there was "no alternative".

And he mentioned 2,200 job cuts.

Italian Transport Minister, Maurizio Lupi, in a warning on Monday to Italian trade unions which are strongly opposed to job cuts, said that Alitalia had but two options: "the plan for recovery with Etihad, or the abyss."

On June 11, Lupi mentioned that Etihad might make an initial investment of 560 million euros ($762 million). To this might be added "690 million euros in four years for the development and renewal of the fleet of aircraft."

The outlook with Etihad as a key shareholder is causing deep concern in northern Italy in case it reduces activity at Milan's Malpensa airport.

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Alitalia board gives green light to Etihad deal

The board of struggling Italian airline Alitalia has approved a tie-up proposal with the Emirati carrier Etihad Airways, a company statement said on Friday.

Alitalia chairman Roberto Colaninno and chief executive Gabriele Del Torchio are charged with negotiating details of the deal with the Abu Dhabi airline, said the statement issued after a marathon meeting.

Etihad has for months been negotiating to buy up to 49 per cent of the stricken Italian flag carrier, which is facing bankruptcy.

But talks have have stumbled over Alitalia's heavy debt load and forecast cuts to some 2,200 jobs, out of a total of 12,800, as part of the deal.

Officials in northern Italy have also raised concerns over the potential impact on Milan's Malpensa airport, which they fear could be seriously penalised by the deal.

Detailed talks on all those issues were set to continue despite Friday's green light.

Del Torchio, quoted by Italian news agency ANSA, said after Friday's talks that negotiations with banks on Alitalia's debt burden were "continuing in the right direction."

"It takes time, since it involves a large sum. But everyone clearly wants to reach a solution with Etihad."

On the jobs front, new talks between Alitalia management and unions were set for Monday, Italian media said.

Italian Transport Minister Maurizio Lupi warned earlier this week that negotiations would have to be wrapped up by mid-July on the tie-up with Etihad, which he said was prepared to invest up to 1.25 billion euros in Alitalia by 2018

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Alitalia may lose 2,200 jobs in tie-up with Etihad

Struggling Italian airline Alitalia will have to shed 2,200 jobs as part of its planned tie-up with Etihad Airways, which has promised to invest 560 million euros ($760 million), the head of the Italian airline said on Monday.

Negotiations have been running for months for the Emirati airline to take a 49 per cent stake in Alitalia, which currently employs 12,800 people and is facing bankruptcy.

The Italian airline will have to go through a restructuring that is "complex, tiring and painful -- there is no alternative," said Gabriele del Torchio, Alitalia's chief executive, on the sidelines of a conference in Rome.

It had previously said as many as 2,500 jobs were on the line.

The airline's management hopes to finalise a deal on the company's debt by Friday.

Del Torchio said talks with banking creditors were "very advanced", and that they were demanding "a sacrifice".

"I think it will take only a few weeks to conclude the deals with Etihad," he said, adding that a successful deal would send "an important signal" about Italy to foreign investors.

AirFrance-KLM also owns a stake in Alitalia, but chose not to pursue taking over the Italian airline after it could not get similar guarantees on deep restructuring to make it profitable.

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Etihad boss meets Italian PM with Alitalia deal close: Ansa

Etihad Airways boss James Hogan met with Italy's Prime Minister Matteo Renzi on Thursday, as his company nears a deal to purchase a stake in debt-laden Alitalia airline, Italian media reported.

The meeting took place in the prime minister's official residence with Renzi's right-hand man cabinet secretary Graziano Delrio also attending.

The Ansa news agency cited sources saying that a deal on could be in place "within hours".

On Tuesday, Italy's Transport Minister Maurizio Lupi told a Senate hearing that Abu Dhabi-based Etihad had completed its assessment on whether to purchase a stake in Alitalia and that a draft deal could be imminent.

Italian business daily Il Sole 24 Ore also on Tuesday said Etihad was planning to buy a stake of around 40 per cent, which would make it by far the biggest shareholder in the carrier and respect the 49.9-percent limit for non-European airlines.

It also said Etihad could invest between 300 million and 500 million euros ($414 million and $690 million) in return for a restructuring plan that would include up to 3,000 job cuts and an upgrade of infrastructure.

Alitalia in February reached a deal with trade unions for the equivalent of 1,900 job cuts and in September last year shareholders gave unanimous approval for a capital increase to save the airline from bankruptcy.

Etihad is expanding rapidly and has bought minor shares in several smaller carriers including Air Berlin and India's Jet Airways as it competes with larger Gulf rivals Emirates and Qatar Airways.

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Etihad Airways in discussions with debt-laden Alitalia

Emirati carrier Etihad Airways is in discussions with debt-laden Italian airline Alitalia, spokesman Tom Clarke said on Thursday, without elaborating.

"Etihad Airways is in discussions with Alitalia. We have no further comment at this time," Clarke said in a terse text message to AFP.

Reports have suggested that the Abu Dhabi-based carrier was preparing a big investment in Alitalia, which is in debt to the tune of 1.2 billion euros (US$1.6 billion).

In October, shareholders gave unanimous approval for a capital increase of up to 300 million euros to save Alitalia from bankruptcy

The carrier has been looking for a foreign partner to rescue it.

Earlier on Thursday, Italian media reported that Italy's postal service would take part in a capital increase for Alitalia and chip in 75 million euros.

But postal officials contacted by AFP did not confirm.

Another 225 million euros in the capital increase have already been contributed by Alitalia's existing private sector investors and by banks.

Air France-KLM, which was until now was the main shareholder with 25 percent, has declined to contribute and will see its share greatly diluted.

Alitalia has launched a vast restructuring plan with 300 million euros in budget cuts and the reduction of 1,900 jobs.

The capital increase plan was formulated in October and November under pressure from the Italian government but the postal service's participation has been widely criticised as a possible state subsidy.

Etihad is vastly expanding and has bought minor shares in several smaller carriers around the world as it competes with larger Gulf rivals Emirates and Qatar Airways.

Etihad owns 29 percent of Air Berlin, 40 percent of Air Seychelles, 19.9 percent of Virgin Australia and three percent of Aer Lingus.

In November, India's Jet Airways said it had completed the sale of a 24-percent stake to Etihad after obtaining regulatory approvals.

Analysts said that, for airlines such as Etihad, part of India's allure is the chance to swell passenger traffic on routes to North America, Europe, the Middle East and other parts of the world.

Etihad also announced in mid-November that it was acquiring 33.3 percent of Swiss carrier Darwin Airline, which it plans to rebrand as Etihad Regional.

The acquisition is awaiting regulatory approval.

Etihad is also due to acquire 49 percent of Air Serbia in January.

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Ryanair steps up flights in Italy as Alitalia suffers

Irish low-cost airline Ryanair announced on Tuesday a major increase in the domestic flights it offers in Italy including launching a hub at Rome's Fiumicino Airport.

The expansion comes a day before the deadline for a crucial capital injection into struggling Italian flag carrier Alitalia which has been on the brink of having its planes grounded, but Ryanair said its move should help the airline in its efforts to restructure.

Ryanair announced it will base six aircraft at Fiumicino, Rome's mostly domestic airport, and slowly transfer the flights it had operated from Ciampino airport and increase to nine the number of domestic Italian routes it flies.

The number of aircraft based there could double within a year as it receives new aircraft from Boeing.

Ryanair said it would continue to develop domestic and international flights from Ciampino, the mostly international airport.

Ryanair said its one-way flights on new domestic routes will start at 49 euros ($66) including taxes, compared to 75 euros on Alitalia flights.

Nevertheless Ryanair said this would benefit Alitalia as it would ensure the feeding of passengers into the international flights it operates from Fiumicino.

"Ryanair will guarantee that connectivity to Rome and to southern Italy will be maintained regardless of Alitalia's plans to reduce capacity on domestic routes," said Ryanair's deputy chief executive Michael Crawley in a statement.

The Irish airline said it was willing to cooperate with Alitalia, an offer the Italian company swiftly rejected.

"Alitalia thanks Ryanair for its proposal to collaborate at Rome Fiumicino airport, but we have our own strategy..." said the Italian airline.

A 300-million-euro Alitalia capital subscription expires on Wednesday.

Air France-KLM, which owns a 25 percent stake in Alitalia, has said it won't participate as it believes the restructuring plan put forward by the company won't lower costs sufficiently to make the airline successful.

The Italian government is looking for another major international airline to partner with Alitalia.

The state-owned Italian postal service has been tapped to contribute up to 75 million euros in the capital increase, triggering rivals' allegations of illegal protectionism.

Alitalia says Italian banks are also lined up to lend it 200 million euros.

The airline was already bailed out by taxpayers five years ago in a controversial operation that handed a consortium of private Italian companies a majority stake, part of which was later sold to Air France-KLM.

But it still struggled and racked up losses, with its debt now standing at 1.2 billion euros.

It was nearly grounded last month when Italian energy group ENI threatened to stop fuel supplies because of unpaid debts.

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Air France sets out conditions for Alitalia investment

Air France-KLM has laid out strict conditions for further investment in Italy's troubled Alitalia airline, including the cutting of 5,000 jobs, Italy's top business daily reported on Sunday.

The conditions, including the ousting of Alitalia's board of directors and a vast debt restructuring plan, were presented to Italy's transport minister Maurizio Lupi some 10 days ago, Il Sole 24 Ore said, without citing sources.

The job losses are far greater than those tabled by the Italian airline in its current restructuring plan, the report said.

Alitalia has been trying to persuade shareholders to inject funds as part of a 300 million euros ($407 million) recapitalisation programme.

Shareholders including Air France-KLM, which currently holds a 25 percent stake in Alitalia, have until the middle of November to decide whether or not to participate in the capital increase.

Air France-KLM chief executive Alexandre de Juniac said Thursday that since talks on recapitalisation began, the French group had been clear about requiring "strict financial, industrial and social conditions" and a "profound restructuring" for Alitalia.

The capital increase plan was put together in a hurry under pressure from the government, as energy major ENI threatened to ground the fleet by stopping fuel supplies because of unpaid debts.

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