Alitalia in three-year rebuilding period, says Etihad chief

Ten new long-haul routes will be introduced as part of the Italian carrier’s five-year plan.

President and chief executive of Airways James Hogan (L) and Alitalia CEO Gabriele del Torchio sign an alliance agreement. ALBERTO PIZZOLI / AFP
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Rome // A new era awaits Italy's loss-making carrier after Etihad Airways agreed to acquire a 49 per cent stake in Alitalia that includes new aircraft, new routes to Abu Dhabi and new livery.

“This is a three-year rebuilding exercise,” said James Hogan, Etihad Airways’ chief executive, after the Abu Dhabi airline agreed to invest €560 million (Dh2.75bn) in Alitalia.

As Alitalia refocuses on long-haul flights, the number of wide-body jets in its fleet will be increased by 32 per cent, while the number of narrow-body aircraft will be cut by 13 per cent.

Ten new long-haul routes will be introduced as part of the Italian carrier’s five-year plan, which will seek to develop Rome’s Fiumicino Airport as an intercontinental hub, while Milan’s Malpensa Airport will get more long-haul flights.

“There will be a reduction in domestic flying, and you’ll see more flying from Italy to Abu Dhabi,” Mr Hogan said. Abu Dhabi will have three new routes to Bolgona, Catania and Venice operated by Alitalia.

“The current style of Alitalia is outdated, so we’ve actually been working with the team on a new livery, a new service proposition and new uniforms.”

There are plans to relaunch Alitalia Cargo to further benefit from Italy’s cargo market, the third-largest in Europe. Stakeholders also plan to rebuild Milan’s airport as a cargo hub.

Etihad is keen to tap demand for travel from the more than 10,000 Italian citizens and 300 Italian companies that are based in the Emirates.

The airline has gained a reputation for investing in and turning around struggling carriers to expand its reach into key regions.

Last year it increased its alliances to seven – Air Seychelles, airberlin, Virgin Australia, Air Serbia, Ireland’s Aer Lingus, India’s Jet Airways and Etihad Regional, formerly known as Darwin Airline.

Alitalia approached Etihad last year after its major shareholders, including Air France–KLM, refused to provide more capital and reduced their holding to 7 per cent from 20 per cent.

Etihad has committed to pay €387.5m for the 49 per cent stake in Alitalia, €60m for five slots at London’s Heathrow Airport and €112.5m for 75 per cent of Alitalia’s MilleMiglia loyalty programme.

The rest of the deal includes €300m from core Alitalia shareholders, €598m through debt restructuring and another €300m in new loans from Italian banks.

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