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Etihad buys 49 percent of loss-making Alitalia
Gulf's Etihad boosts European airline holdings with 49 pct stake in loss-making Alitalia
Associated Press
2014-08-08 11:22 PM

ROME (AP) -- Fast-growing Gulf airline Etihad Airways is to inject 560 million euros ($750 million) into Italy's loss-making national carrier Alitalia, in a move that will see it gain access to one of Europe's major markets.

Etihad, which is buying a 49 percent stake in the Rome-based carrier, said Friday it will restructure Alitalia and even laid out the hope of returning it to profitability by 2017.

Etihad Airways CEO James Hogan announced the three-year plan to completely reboot the Alitalia brand at a press conference at a Rome hotel, saying it was a strong airline but "a poor business financially" that needed to be turned around.

"If we didn't believe Alitalia could restructure and win we wouldn't be here," he said alongside his Alitalia counterpart, Gabriele Del Torchio. "The sexiest airline in Europe should be Alitalia."

The two signed the deal after months of negotiations over debt restructuring, proposed job cuts and other issues that sparked fierce opposition from Italian unions. Airline workers have staged wildcat strikes at Rome's main airport this week to protest the deal.

The deal adds one of Europe's most recognizable aviation brands to Etihad's growing collection of foreign investments that also includes AirBerlin, Air Seychelles, Virgin Australia, Aer Lingus, Air Serbia and Jet Airways.

Etihad is owned by the government of Abu Dhabi, the oil-rich capital of the United Arab Emirates.

Hogan said the new airline would be able to capitalize on Etihad's growing conglomerate to reduce overhead and expand reach. Plans call for beefing up Rome's Leonardo da Vinci airport as a hub, adding more long-haul routes and trimming back less-performing shorter routes.

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