Alitalia must be ‘brought back to life’: Etihad CEO

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

Alitalia must be 'brought back to life': Etihad CEO
Etihad Airways is planning to buy a 49-percent stake in Alitalia, which currently employs 12,800 people. Etihad photo: Shutterstock

"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-energized and brought back alive," he continued, adding: "A re-energized 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 percent 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.

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-percent 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, and €660 million 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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Italy insists €3bn cash injection for Alitalia is ‘not another rescue’

The Italian government announced plans on Thursday to inject at least three billion euros ($3.2 billion) into Alitalia to help save it from collapse in the face of the coronavirus pandemic.

Italy insists €3bn cash injection for Alitalia is 'not another rescue'
Alitalia check-in counters stand empty at Rome's Fiumicino airport during Italy's lockdown. Photo: AFP

Economic Development Minister Stefano Patuanelli told the Senate the money was aimed at turning the struggling company into the national airline it had been throughout much of its 74-year history.

“This is not another rescue,” Italian media quoted Patuanelli as saying. “This is the company's relaunch.”


Prime Minister Giuseppe Conte's government in March announced plans to renationalise Alitalia as part of a broader economic rescue package.

It then earmarked 500 million euros in support for the entire aviation sector.

The company filed for bankruptcy in 2017 and looked doomed in January when it failed to secure rescues from either the Italian state railway or Germany's Lufthansa.

Alitalia's management had asked government administrators in March to allow it furlough 4,000 of its 11,000 employees until more passengers are able, and willing, to fly.

The carrier's main trade union announced an agreement Thursday to suspend about 6,600 employees for seven months.

Patuanelli said government administrators intended to keep Alitalia's current fleet.

“There is no downsizing at the company,” the minister said.