Alitalia, Etihad Deal Likely To Be Cleared By End Of Year

Italian airline Alitalia and Etihad Airways are expected to win clearance for their tie-up by the end of the year with minor concessions, a person familiar with the matter said on Tuesday.

Abu Dhabi-based Etihad clinched a deal last month to buy 49 per cent of lossmaking Alitalia for 1.76 billion euros ($2.31 billion), giving it access to Europe’s fourth-largest travel market and 25 million passengers.

Cash-rich Etihad, which has minority stakes in Air Berlin, Ireland’s Aer Lingus, Virgin Australia and other global airlines, would be the largest single shareholder in Alitalia after the deal.

“The deal is expected to be notified to the European Commission this month. It should be conditional, phase-one clearance,” said the person, who declined to be named because of the sensitivity of the matter.

A phase-one review by the EU antitrust authority lasts 25 working days, which is extended by 10 additional working days if companies offer concessions to allay competition concerns.

The commission’s spokesman for competition policy, Antoine Colombani, declined to comment. Alitalia and Etihad were not immediately available for comment.

The source said the airlines may have to give up some airport slots or overlapping routes should the Commission have concerns that the deal may reduce competition.

Etihad has daily flights from Abu Dhabi to Rome and Milan, while Alitalia operates five flights a week from Rome to Abu Dhabi.

In previous airline deals, EU regulators have forced carriers to surrender rights over slots, grant traffic rights and open up their frequent flyer programmes to rivals.