Air Malta investment is ‘sub-zero risk, won’t cost a euro’ – Alitalia president

Alitalia to consider Air Malta decision for end-June, due diligence on airline underway

Alitalia chief Luca di Montezemolo
Alitalia chief Luca di Montezemolo

Alitalia’s president Luca Cordero di Montezemolo said the Italian national airline will be discussing a forthcoming memorandum of understanding for a 49% acquisition of Air Malta in June.

The national airline could be sold to the Italian airline, which is itself 49% owned by the Abu Dhabi airline Etihad, if negotiations are successful.

“We spoke about it yesterday during an interesting board meeting. We’ll be looking at it in the summer, maybe by end-June, and we’ll be able to take a decision,” Cordero di Montezemolo said during an Alitalia Day showcase.

“If it goes forward, it would be a zero-risk operation – sub-zero, indeed – for Alitalia. It is an investment that would not cost a euro, and would open up interesting connections with Sicily. Let us work on it, let’s carry out a management and economic due diligence.”

Montezemolo’s comments are sparking a debate as to whether any investment for the Air Malta acquisition will be carried out directly by Etihad.

Alitalia forms part of the satellite of airlines owned by Abu Dhabi based airline Etihad Airways, which has been in advanced talks with government over an equity investment in the ailing Air Malta since November 2015 as revealed by MaltaToday.

Etihad Aviation Group CEO James Hogan told reporters Wednesday in Rome that the ailrine was confident that Air Berlin and Alitalia would achieve turnaround. “We are halfway through the Alitalia restructuring process, which started less than two years ago,” Hogan said. “We are looking at cost synergies between Air Berlin and Alitalia and between Air Berlin and other airlines. But we are not integrating them.”

He also confirmed that the Italian carrier expects by the end of June to decide whether to buy a 49% stake in Air Malta.

Etihad, the No. 3 airline in the Persian Gulf, bought minority stakes in seven carriers from Australia to Europe to funnel passengers through its Abu Dhabi hub and share costs, and it has formed the aviation-group parent company as part of the process.

While some of the partners such as Jet Airways (India) and state-controlled Air Serbia have reached financial targets, Etihad has had to prop up others, including Air Berlin and Rome-based Alitalia.

Alitalia plans to invest €400 million in its business this year and is evaluating options to add more long-haul aircraft to its 98 narrow-body and 24 wide-body planes, according to a presentation on Wednesday. Of the total, €240 million will pay for fleet expansion and cabin interior refurbishment, Alitalia CEO Cramer Ball said.