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UAE/Italy: Etihad chooses bold acquisition target

 |  April 10, 2014

United Arab Emirates-based Etihad Airlines has reportedly chosen its latest acquisition target to follow a long string of investments that have aided struggling airlines.

Etihad is said to be seeking a deal with Italy’s Alitalia, an airline facing challenges amid financial losses and state intervention. Such a move would be only the latest merger for the airline that began with an acquisition of a 2.99 percent stake in Air Berlin.

Etihad quickly acquired shares in Aer Lingus, Jet Airways India and Virgin Australia, among several others throughout the globe.

It’s a questionable strategy, say reports, as the industry is seen to be shying away from non-controlling stake buys and towards alliances and joint ventures.

With Alitalia, say reports, the airline has lost $1.5 billion over the last five years and, while the number-one in EU outbound travel, is facing harsh competition from budget rivals EasyJet and Ryanair.

Etihad’s strategy was one similar to Swissair’s, a plan that eventually lead to the company’s demise. But, say reports, Etihad has the crucial backing of the state looking to boost the company to the ranks of Qatar and Emirates.

Full Content: Bloomberg

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