The Italian carrier Alitalia has “fantastic potential” for growth but only if it embraces change, warned Etihad Airways, which owns a 49 per cent stake in the carrier.
The airline was “on the verge of collapse” last year, said James Hogan, Etihad’s president and chief executive. Bloomberg cited Mr Hogan as saying that it was now on course to return to profitability in 2017 following Etihad’s equity investment.
Speaking in Milan at the International Forum of Sovereign Wealth Funds yesterday, Mr Hogan, who is also the vice chairman of Alitalia, said the Italian carrier “cannot afford to revert to past practices”.
Etihad last year invested €560 million (Dh2.3 billion) in the form of equity, asset purchases and other funding arrangements as part of a €1.76bn restructure of Alitalia in return for a 49 per cent stake in the airline.
Alitalia reported a net loss of €130m for the first half of this year.
“For Alitalia to survive and thrive, there must be a relentless focus on costs and efficiency, coupled with a commitment to delivering quality, innovation and value for money,” said Mr Hogan.
“Partnership offers lower risks, greater rewards and faster outcomes than going it alone.”
Etihad and its equity partners, including Alitalia, raised US$700 million in a debut bond issue earlier this month to help fund their expansion.
Alitalia withdrew or curtailed underperforming routes and launched new ones during the first quarter. They include a route between Milan Malpensa and Shanghai for the duration of Milan Expo this year, between Rome Fiumicino and Seoul, and direct daily flights to Abu Dhabi from Milan Malpensa and Venice. It unveiled a new livery, brand and product upgrades in June. Through its partnership with Etihad, Alitalia now has access to Australian and African markets, which it did not serve previously.
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