01 Oct 2015 21:30
Etihad Airways, a key investor in Alitalia, believes Italy’s national airline has “fantastic potential to grow” – but only if it embraces change.
in Milan to the International Forum of Sovereign Wealth Funds, James Hogan, the
President and Chief Executive Officer of Etihad Airways, and Vice Chairman of
Alitalia, said that, “last year, Alitalia was on the verge of collapse.”
invested 560 million euros as part of a €1.76 billion restructure of Alitalia,”
said Mr Hogan. “Today, we are the largest single shareholder, with a 49 per
cent stake. What did we see in Alitalia that nobody else did? A great
brand, a great network, but a poor business in need of a new direction.”
Hogan said Etihad Airways saw great potential for both airlines to grow
efficiently by working together. “Partnership offers lower risks, greater
rewards and faster outcomes than ‘going it alone’,” he said. “That’s good for
Alitalia, good for Etihad Airways, good for Italy and good for consumers.”
Mr Hogan said Etihad
Airways and Alitalia had complementary route networks which, combined, offered
approximately 200 destinations. He said Alitalia gained significant new flight
connectivity by connecting with Etihad Airways at its hub in Abu Dhabi,
providing extensive access to destinations across Asia, and in Australia and
Africa – destinations not served by Alitalia.
But he said the
Etihad – Alitalia partnership offered much greater benefits for customers
including the alignment of inflight product and service, expansion of both
carriers’ frequent flier programs, and synergy benefits including joint
procurement and resource sharing.
Recently, Etihad Airways
and six equity partners, including Alitalia, participated in an innovative
capital raising, through which US$700 million was collectively sourced from
global financial markets.
Luca Cordero di Montezemolo has a clear vision for the success of the Alitalia
business, one which we share fully.
Together, we are working to re-establish the airline to its rightful
place as one of the great international brands,” said Mr Hogan.
ascending. But it still faces challenges.
It cannot afford to revert to past practices. For Alitalia to survive
and thrive, there must be a relentless focus on costs and efficiency, coupled
with a commitment to delivering quality, innovation and value for money.
Through our partnership, we can achieve success together.”