Etihad Acquires 75% Stake In Alitalia’s Frequent Flyer Scheme

Abu Dhabi-based Etihad Airways has acquired a majority stake in Italian carrier Alitalia’s frequent flyer programme MilleMiglia for a consideration of $127 million.

The UAE flag carrier will hold 75 per cent of Alitalia Loyalty, which owns and operates MilleMiglia, while Alitalia will retain the remaining 25 per cent, a statement said.

MilleMiglia is Italy’s largest frequent flyer programme, with 4.6 million existing members and more than 20,000 new members a month.

Post the deal, MilleMiglia will become part of Global Loyalty Company (GLC),a group that allows Etihad and its equity partners to target the global loyalty market more effectively.

GLC also consists of Etihad Airways’ Etihad Guest, airberlin’s topbonus and Jet Airways’ JetPrivilege programmes. With the addition of MilleMiglia, Etihad and its partners will have a combined total of 14 million members worldwide.

It will also give more opportunities for guests to collect and redeem their miles around the world, Etihad added.

“The loyalty programme sector is a faster growing and higher margin business than the airline industry,” said James Hogan, president and CEO of Etihad Aviation Group.

“This approach allows both Etihad Airways and Alitalia to reap greater rewards together, with opportunities to generate sustained profits from our loyalty programmes.

“Importantly, this investment also ensures MilleMiglia’s members will benefit from long-term plans to develop Global Loyalty Company into a broader, multi-partner loyalty programme across the core markets of Italy, Germany, India and the United Arab Emirates.”

Etihad acquired a 49 per cent stake in Alitalia in December 2014, further widening its growing network through the equity partnership.

“The investment is part of the recapitalisation and restructuring of Alitalia, which provides the airline with a sound financial platform for its future growth,” said Silvano Cassano, CEO of Alitalia.

Aside from Alitalia, Etihad has stakes in Air Seychelles, airberlin, Virgin Australia, Aer Lingus, Air Serbia and Jet Airways. It also has an investment in Darwin Airline that is pending approval.

The Gulf airline has been boosting its passenger numbers and connectivity through such equity partnerships and codeshares.

Recently Etihad said that it flew almost 14.8 million passengers in 2014, up 23 per cent from 2013.