Etihad Airways and Alitalia
announced that they are close to agreeing upon an investment deal to help the
troubled Italian airline. Though it may
take several more days, sources have revealed the investment deal could give
nearly 40% of the rights to Etihad Airways, an Abu Dhabi carrier that has
recently taken stakes in a few other European airlines. The Italian company, Alitalia, is facing
large sums of debt, has already been bailed out by the government, and is regarded
as one of the country’s most important assets.
The deal would be a strong base to get Alitalia back on their feet,
while also sparking the development of the firm’s employee base.
I found this article to be
rather interesting especially since there was a merger a few months ago between
American Airlines and US Airways. Since
their merger, both firms have profited.
Hopefully Alitalia will be able to get back on their feet, and Etihad
Airways will be able to generate strong business.
http://www.bbc.co.uk/news/business-26011191
3 comments:
From the information the article provided, it seems like a win-win for both parties. Etihad Airways is able to take up to a 40% share of Alitalia's airline company and Alitalia is in dire need of cash and employee development. I wonder how much of the European market share this will allow Etihad Airways to capture and subsequently the profit margins. Maybe more non-stop flights to the United States after already offering destinations to four United States cities: Chicago, New York, Washington D.C., and most recently Los Angeles? The United States Government would seem to be in favor of this deal as it looks to improve on the $22.5 billion (USD) of annual trade between itself and the United Arab Emirates.
A merger for these airlines can be complicated. Look at the case of United Continental few years ago. It took years for them to troubleshoot all the problems with the system. I am not sure if this merger can be successful because unlike American and US Airways, Etihad Airways and Alitalia are from different countries. Etihad also has taken stake in many European airlines recently, and it seemed like they want to gain shares from this market so badly.
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