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Ferrari chairman involved in potential Alitalia-Etihad deal

'A pleasure to help my country' says Montezemolo

04 March, 14:30
Ferrari chairman involved in potential Alitalia-Etihad deal (ANSA) - Geneva, March 4 - The chairman of Ferrari said Tuesday he is helping facilitate a deal for Etihad Airways to invest in Italy's troubled flag carrier Alitalia. "My role is to help bring about a deal," said Luca Cordero di Montezemolo, when asked if he may become Alitalia chairman if a deal goes through. "It's a very strong group," he added of the the flag carrier of the United Arab Emirates. "It's a pleasure to give a hand, to do what's best for my country, which is to bring about a potential deal that would be important for Italy". Weeks after hopes had been raised in Italy surrounding potential investment in its ailing liner, reports surfaced Monday that Etihad has not yet made a decision on the venture. Etihad Airways Chief Executive Officer James Hogan told a news conference in the United Arab Emirates that the carrier would make a decision "in the next two weeks" on what action would be most appropriate for his airline's shareholders as well as "what we can do under European legislation". European airlines, including German carrier Lufthansa, have complained of disguised State aid in a tie-up between Etihad and Alitalia, in alleged contravention of European Union competition rules. Hogan added that Etihad is "convinced" that the Italian airline can return to profitability. For weeks, intense negotiations have continued between Alitalia and Etihad, which has been carefully scrutinizing the Italian carrier's books. Last week, Alitalia CEO Gabriele Del Torchio was said to be "optimistic" about the outlook for the deal because it would be "beneficial for both (parties)". A deal would include conditions set by Etihad on cleaning up the Italian carrier's finances and reducing labour costs. It is expected that nearly 80 million euros can be saved annually with rotating layoffs and another 40 million euros saved through wage cuts.

A partnership with Alitalia would also deepen Etihad's existing links with the Italian company's minority investor and code-share partner Air France-KLM, which previously refused a further investment in the cash-starved Italian carrier. 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. But the arrangement, as well as other plans to bring Alitalia back to profitability, have been controversial. In addition to Lufthansa's competition, the owner of British Airways has said that a plan coordinated by the Italian government to rescue Alitalia triggered the same concerns.

The complaints came as Alitalia was poised to sign a 200-million-euro financing deal with banks as part of a 500-million-euro 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. International Airlines Group (IAG), the holding company that owns British Airways, Iberia and Vueling called that a form of protectionism and is illegal under EU laws governing state assistance to businesses.