Etihad to buy 49% stake in Alitalia

[DUBAI] Alitalia SpA and Etihad Airways PJSC have agreed on principal terms that will give the Middle Eastern airline a 49 per cent stake in the bailed-out Italian carrier.

The two airlines will next complete final documents for a transaction, according to a joint statement yesterday, and conclusion will depend on regulatory approval. No financial details of the possible investment were disclosed. The two airlines announced weeks ago that they were in talks.

Alitalia had sought a new partner after Air France-KLM Group bowed out of a rescue brokered by the government last year. The airline has been unprofitable for years and is in the process of cutting thousands of jobs as its domestic market comes increasingly under attack from low-cost airlines and global carriers including Emirates, which services Milan.