Italian minister expects Etihad-Alitalia alliance to be up and running by January 1

Etihad Airways has gained a reputation for investing in and turning around struggling carriers.

It is the first time that Maurizio Lupi, the Italian minister of infrastructure and transport, has set a specific date for the alliance to launch. Alessandro Bianchi / Reuters

Maurizio Lupi, the Italian minister of infrastructure and transport, says that he sees “no obstacles” to the Etihad Airways and Alitalia deal and expects their alliance to be fully operational by January 1.

"I really don't think that there will be any obstacle at this stage, especially that the [Italian] government is backing the deal," Mr Lupi told The National in an interview last week.

This is believed to be the first time that Mr Lupi, who has been a key player in the Italian government’s negotiations with Etihad, has set a specific date for the alliance to launch.

Mr Lupi said that the time frame for the deal will include: European Commission approval of Etihad’s takeover of a 49 per cent stake in Alitalia, which is due November 17. This will be followed by a month “to allow all technical operations to be processed from a legal point of view”.

“On January 1 there should be the full operations of the alliance between Etihad and Alitalia,” said Mr Lupi.

Meanwhile, an Etihad spokesman said the airline was in “ongoing discussions” with the EC and remains confident of an approval by November 17.

In August, Etihad committed to pay €387.5 million (Dh1.78 billion) 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 included €300m from core Alitalia shareholders, €598m through debt restructuring and another €300m in new loans from Italian banks.

Etihad 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, namely: 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.

One challenge that faces Etihad is to prove that the deal falls under the rules of European regulators regarding foreign investment. In August, The Swiss Federal Office of Civil Aviation said it wants to ensure that Etihad’s stake in Darwin complies with its rules, which states that 50 per cent of an airline should be owned or effectively controlled by EU citizens.

Commenting on the matter, Mr Lupi said that starting from the beginning of next year the new Alitalia management will be “a choice of the investors, because the government doesn’t have a share at the moment”. Alitalia was privatised in 2009 and the airline was de-listed from the stock market.

“It will be down to the actual shareholders to decide the board of directors, according to majority shareholders,” said Mr Lupi.

“The chairman of the board of directors will be chosen by the majority shareholders. He will be Italian obviously … having control,” Mr Lupi added.

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