Etihad, Alitalia Deal to be Finalized Tomorrow?

T he agreement for Etihad Airways to purchase a stake of 49 percent in Alitalia is expected to be finalized on Friday, August 8, 2014 after a reportedly positive meeting between James Hogan — the chief executive officer of Etihad Airways — and officials of the government of Italy.

Etihad Airways is expected to invest a minimum of 500 million euros into the troubled carrier — which is currently in debt to the tune of approximately 800 million euros — with possible additional infusions of cash in the future.

Gabriele Del Torchio — the chief executive officer of Alitalia — was quoted in June as saying that he expected approximately 2,200 jobs to be eliminated as a result of the partnership with Etihad Airways.

Meanwhile, Poste Italiane — the national post office of Italy — is currently in talks to partner with Etihad Airways and could possibly invest 70 million euros in Alitalia. Possible synergies include ticket sales, holiday insurance policies and e-commerce.

What this means for you as a frequent flier is that Alitalia will continue to do business as usual — and there is a more promising future for the national airline of Italy, which has reported a profit only a few times in its history of 68 years. There have been concerns in recent years by frequent fliers pertaining to the viability of Alitalia, which is a partner airline in the SkyTeam alliance.

This is good news for me, as I am scheduled to be a passenger on some flights operated by Alitalia in the near future — and I have to say that Alitalia has treated me quite well as a passenger on flights it operated in the past.

I would think that this partnership could potentially open the door to some positive developments for frequent fliers — such as a partnership between the two frequent flier loyalty programs — but that remains to be seen.

What are your thoughts as to the pros and cons of this deal between Etihad Airways and Alitalia?

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