Etihad Airways has gained European merger clearance for its rescue of ailing Alitalia.
The decision by the EU approves the largest ever foreign investment in Alitalia with a 49% stake as part of €1.76 billion package to revive the loss-making Italian flag carrier.
The two carriers now hope to complete the transaction before the end of the year.
The European Commission confirmed that the partnership announced in August complies with European competition regulations on competition following a review of the proposal by the UAE carrier.
As part of the agreement, the two airlines agreed to commitments to give up airport slots to allow the entry of new airlines on the Rome-Belgrade route which is dominated by Alitalia and Air Serbia, in which Etihad has a minority shareholding.
Etihad Airways president and CEO James Hogan, said: “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 and broader travel opportunities to business and leisure travellers into and out of Italy.”
The Italian airline’s CEO Gabriele del Torchio said: “This is an excellent outcome for Alitalia. This investment will provide financial stability and a foundation for impressive long-term growth for the company and for the travel and tourism industry in Italy, in which Alitalia is a fundamental player.”