Etihad's expansion strategy faces test

[FRANKFURT] A potential deal to buy a stake in troubled Italian airline Alitalia could be the biggest test yet for Abu Dhabi-based Etihad's strategy of using stakes in ailing airlines as an easy way to expand its global footprint.

Etihad's collection of minority airline stakes stretches from the Seychelles to Ireland and Australia, and dates back to the purchase of an almost 30 per cent stake in Air Berlin at the end of 2011.

What Etihad calls its "airline equity alliance" strategy differs from that of larger regional rivals Emirates, which is striking out on its own, and Qatar Airways, which in a surprise move, turned to the OneWorld airline alliance last year to boost its network coverage.