(MENAFN - The Peninsula) Etihad Airways' Chief Executive said talks to pick an equity stake in struggling Italian carrier Alitalia could swing either way, as the Gulf airline entered into the final phase of due diligence for the investment
Etihad posted a 48 percent leap in 2013 profit yesterday and predicted more growth this year, as the Abu Dhabi airline aims to develop its alliance network with a potential investment in Alitalia
Etihad, which has minority stakes in seven airlines including Air Berlin and Virgin Australia, earned a net profit of 62m last year, up from 42m in 2012
Revenue rose 27 percent in 2013 to 6.1bn, the state-owned carrier said in a statement. The ten-year old airline, which carried nearly 12 million passengers last year, made its first profit in 2011
Etihad, which is leading a global acquisition drive, is looking to deepen its network in Europe after taking a stake in Air Berlin in 2011 and entering into a srategic code-share deal with Air France-KLM. But the Gulf airline is not hurrying into a deal with Alitalia, which is struggling with its more than 1.1bn debt and growing competition. Asked in an interview how confident he was at this stage of the deal going through, James Hogan said: "It's 50-50." "We had also entered into due diligence with other airlines in the past and walked away.
Hogan said the deal could only go ahead if Alitalia met Etihad's criteria on costs, profitability, restructuring, the airline's network and strong management. He did not provide further details
Talks between the airlines intensified last month and sources close to the matter said Etihad might be interested in buying a stake of up to 40 percent in the Italian carrier.
The Gulf carrier will receive 2bn in financing from banks to fund the delivery of about 19 new jets that will join the fleet this year, James Rigney, chief financial officer of Etihad said.Reuters