Ciao, Alitalia! Abu Dhabi's Etihad 'Rescue' Only Delays Demise:
"Etihad, the national airline of the United Arab Emirates, is about to clinch a deal to rescue Italy’s long-suffering flag carrier Alitalia. Etihad could put some 500 million euro in the Italian firm in exchange for a 49 percent stake, provided the debt level is cut and operating costs reduced mainly through a wave of redundancies.
Existing shareholders will see their stakes cut. This includes the Italian post operator, the Atlantia toll road operator, banks Intesa Sanpaolo and Unicredit and former white-knight, airline Air France KLM. The banks have to give twice as they lose part of an equity stake and have to take a debt haircut. The alternative is a grounding of the airline – a traumatic experience that Swissair suffered in 2001 when lack of cash meant it could not pay fuel and its planes could not take off, hitting some 40,000 passengers.
There still remain hurdles to the deal. The labor unions could launch industrial action to protest job cuts and the European Commission may frown about a state-owned airline, Etihad, taking a stake in Alitalia in a sort of partial privatization."
'via Blog this'
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