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Alitalia chief says Etihad due diligence to end in 4 weeks

Airline to continue Air France link even after investment deal

26 February, 14:51
Alitalia chief says Etihad due diligence to end in 4 weeks (ANSA) - Milan, February 26 - Etihad Airways should be finished conducting its due diligence on Alitalia within the next month as it considers a possible investment, the chief executive of the troubled Italian carrier said Wednesday.

Gabriele Del Torchio said he could not comment on how the process is going, but he expected the Abu Dhabi-based Etihad should finish its investigations of Alitalia's books in about four weeks.

Meanwhile, Del Torchio said that Alitalia will continue its relationship with minority investor and code-share partner Air France-KLM, which previously refused a further investment in the cash-starved Italian carrier.

"We want to continue to be loyal partners of Air France with whom we have an agreement until 2017," Del Torchio said as Alitalia unveiled its new in-flight magazine Ulisse. "What's going to happen later on, we will see," he added.

As well, Alitalia has made its first contacts with the new Italian government led by Premier Matteo Renzi and Del Torchio said he felt "satisfaction" that the minister for transportation and infrastructure will remain Maurizio Lupi, "who has taken to heart this affair" and understands the challenges facing Alitalia.

Del Torchio also confirmed labour plans to avoid permanent job cuts by rotating temporary layoffs beginning in early March, which the airline says will save 80 million euros each year.

In early February, Etihad and Alitalia issued a joint statement saying they were in the "final phase" of negotiations for a deal that would see the Abu Dhabi carrier buy as much as a 40% stake in its Italian counterpart, the equivalent of a much-needed capital injection of 350 million euros.

The main issue in talks has been Etihad's condition that Alitalia renegotiate some of its the debt, as well as cut payroll costs by potentially as much as 128 million euros.

German airline Lufthansa has complained of disguised State aid in the deal, in contravention of European Union competition rules.

That followed similar complaints that came as Alitalia was poised to sign a 200-million-euros financing deal with banks as part of a 500-million-euros bailout package engineered by the previous Italian government last autumn.

This also included a controversial 74-million euro investment by Italy's state-owned post office Poste Italiane, which prompted other European carriers to called on the EU to intervene.