MILAN, ITALY: Emirates airline Etihad Airways is to buy 49% of Alitalia, the two companies said after concluding months of tough negotiations, following years of financial crises at the Italian airline.
Troubled and debt-ridden Alitalia is to sell 49% of it equity to Ethihad. Image: This is Italy
Alitalia is weighed down by huge debt, something that is believed to have been a big sticking point in the negotiations which began at the end of last year.
Another problem is cuts in the Alitalia workforce of 12,800 which will be needed. It is believed that about 2,200 jobs will have to be axed.
Etihad Airways has expanded rapidly in recent years, largely on a rise of air travel in the Gulf region of the Middle East.
In a joint statement, which provided no details, the two airlines said they had agreed the "terms and conditions" of a proposed transaction that will see Etihad Airways owning 49 percent of the equity in Alitalia.
The companies said they would tie up the deal as soon as possible subject to approval from regulators.
Source: AFP via I-Net Bridge