Italy 'committed' to Alitalia-Etihad deal, minister says

Emirates FM Al Nahyan meets Mogherini and Renzi in Rome

08 May, 10:59

    Italian Minister of Foreign Affairs Federica Mogherini (R) and United Arab Emirates Minister of Foreign Affairs, Sheikh Abdullah bin Zayed Al Nahyan (L) Italian Minister of Foreign Affairs Federica Mogherini (R) and United Arab Emirates Minister of Foreign Affairs, Sheikh Abdullah bin Zayed Al Nahyan (L)

    (ANSAmed) - ROME -  The Italian government is "committed" to achieving a deal between Alitalia and Etihad, Foreign Minister Federica Mogherini said Wednesday.

    She spoke after a Rome meeting with her United Arab Emirates counterpart Abdullah Bin Zayed Al Nahyan, who said he agreed. "As a government, we will try to create a climate as favorable as possible to the agreement," between Etihad and Alitalia, said the UAE minister, before meeting Italian premier Matteo Renzi in the evening.

    Meanwhile, Italian Transport Minister Maurizio Lupi said he believes a deal is still possible as Gulf carrier Etihad and troubled Alitalia resumed.

    "It is legitimate that the two companies are discussing a number of issues, but I continue to believe that we are on the right path," Lupi told State broadcaster Rai's Radio Anch'io program.

    Lupi said that he would meet later on Wednesday with Alitalia's Chief Executive Officer Gabriele Del Torchio, who had just returned from Abu Dhabi where he met with James Hogan, his counterpart at Etihad. "We are continuing to work," he told reporters shortly after touching down in Italy.

    The UAE-based Etihad has proposed a deal that could total as much as 500 million euros, including a 300-million-euro capital injection into struggling Alitalia in exchange for a share of about 40%.

    However, talks between the two carriers had reached a standstill after Etihad reportedly insisted on major job cuts and said it did not want to take on debt of the loss-making Italian company.

    Reports suggested that a proposal had been made to hive off Alitalia's debt into a separate "bad" company, but the airline's debtors including some of Italy's major banks are concerned they would be forced to take a financial hit on such an arrangement.

    Alitalia debt was shifted into a so-called "bad company" in 2008, when the carrier was previously in crisis. Lupi on Wednesday said that the Italian government was not prepared to take the carrier's debts, saying that Alitalia "is a private company and the debts of a private company cannot be paid off by the State". Ultimately, the two companies involved and not the government will decide whether a deal is possible, said Junior Development Minister Carlo Calenda on the sidelines of meeting of the Organization for Economic Cooperation and Development (OECD). "Governments must do everything possible to clear road of all obstacles, but then negotiations must follow business channels," he said.

    Unions say that a major investment in Alitalia is essential, but have also complained that they fear management is aiming to trim another 100 million euros from its budget, to make the carrier more appealing.

    Alitalia had said last year that its business restructuring plan was aimed at a total of 300 million euros in savings, but now it seems that goal has been increased to 400 million euros, said Mauro Rossi, national secretary of the Filt-Cgil trade union group.

    In February, Alitalia reached a deal with its workers to avert as many as 1,900 redundancies as it struggled to meet the business conditions set by Etihad.

    That labour arrangement was designed to see Alitalia reduce the working hours of a percentage of staff, meaning many could keep their jobs even though the reduced hours would mean reduced pay.

    Other positions were to be rotated with temporary layoffs under the February agreement.

    The size of Alitalia's workforce, as well as the airline's debt load, have been key issues for Etihad which has been interested in an Alitalia investment as a means of improving its access to lucrative European markets. (ANSAmed).

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