Etihad Airways has finalised the conditions it requires for a major investment in Alitalia following months of negotiations.
Etihad did not give further details, but in a TV interview Italy’s transport minister said the UAE carrier was ready to invest around €600 million in the loss-making Italian flag carrier.
Reports say that Abu Dhabi-based Etihad will receive a 49% stake in Alitalia.
The deal needs to be confirmed by the board of Alitalia and other parties.
Alitalia has agreed as many as 2,900 job cuts under the deal and the Italian government has agreed to back a redundancy scheme for affected staff, Reuters reported.
Alitalia handles about 25 million passengers a year, but is weighed down by debts of about €800 million.
Etihad said in a statement that the Italian government “looks favourably” at a tie-up between the two airlines.
Etihad president and chief executive James Hogan said: “We are delighted to be able to move forward with this process and look forward to the successful conclusion of the proposed transaction with Alitalia.
“An equity investment in Alitalia will be beneficial not only for both airlines, but, more importantly, it will give more choice and broader travel opportunities to business and leisure travellers into and out of Italy.”
Alitalia chief executive Gabriele Del Torchio said: “This investment will provide financial stability and confirms Alitalia’s key strategic role as an infrastructure player in the travel and tourism industry in Italy for long-term growth.”
The airline’s president Roberto Colaninno added: “We are delighted to move forward with Etihad Airways providing Alitalia with an ideal strategic partner enhancing the company’s long term growth perspectives.”