Etihad Airways says it will no longer invest in Alitalia after the Italian national carrier filed for administration.
Bankruptcy proceedings were triggered – for the second time in a decade – following a meeting of Alitalia’s shareholders on Tuesday (2 May 2017).
And Etihad, which acquired a 49% stake in Alitalia in 2014, subsequently confirmed that it would cease to invest in the airline, while remaining a “commercial partner”.
“We have done all we could to support Alitalia, as a minority shareholder, but it is clear this business requires fundamental and far-reaching restructuring to survive and grow in future,” said James Hogan, president & CEO of Etihad Aviation Group. “Without the support of all stakeholders for that restructuring, we are not prepared to continue to invest.”
Following its initial investment, Etihad helped Alitalia develop a turnaround plan which set out to return the Italian airline to profit by 2017. But this restructuring plan included major job losses, which have proved a stumbling block.
Etihad argued that its investment “has helped to protect thousands of jobs over the last three years” and blamed Alitalia’s problems on “new marketplace challenges”, such as stiff competition from low-cost carriers and the impact of terrorism on tourism.
Alitalia reassured passengers that, in the short-term at least, it will continue to operate flights as per its current schedule.