Monday, July 15, 2024
European Commission gives approval to Etihad, Alitalia deal

European Commission gives approval to Etihad, Alitalia deal

Alitalia can now restart its freight business because its merger with Etihad Airways has been approved by the European Commission.

On 8 August, Etihad announced its intention to invest 560 million euros ($700 million) in the Italian airline and restart its freight business, operating from Milan Malpensa Airport. With the merger, the joint venture New Alitalia will be the airline that will operate on the existing Italian carrier’s routes. 

The 8 August joint Etihad-Alitalia statement said: “To better serve the Italian cargo market, which is the third largest in Europe, Alitalia’s cargo business will be relaunched and expanded, with the establishment of a centre of excellence in Northern Italy, investment in handling capabilities at Italian airports, and the optimisation of an integrated cargo network.” The European Commission decision followed its review of the investment to analyse the competition effects. It found that only one route presented an issue.

According to the Commission, “In its investigation, the Commission also took into account the interests held by Etihad in Airberlin, Darwin Airline and Jet Airways. However, the Commission’s investigation indicated that the transaction would lead to a monopoly on the Rome–Belgrade route, where Alitalia and Air Serbia are the only carriers offering direct flights.”

Etihad and Alitalia have agreed to release up to two daily slot pairs at Rome-Fiumicino Airport and Belgrade Airport to one or more interested new entrants. They have also agreed to offer an interline agreement, a special prorate agreement, and a fare combinability agreement, to new entrants. The Commission’s approval requires Etihad and Alitalia to implement what they have agreed too.

The two airlines expect to complete the transaction by the end of the year. Etihad’s president and chief executive officer of Etihad Airways, James Hogan, was very pleased with the outcome. He says: “We are delighted to be able to move forward with this process and look forward to a positive outcome and the final conclusion of our transaction with Alitalia. An equity investment in Alitalia will be beneficial not only for the both airlines, but, more importantly, it will give more choice.”


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