The recapitalised Italian national airline will now be able to invest in a comprehensive strategic business plan which will see new long-haul routes from Rome and Milan, a revitalized brand, and a greater focus on Italian tourism and trade promotion. Italian travellers will be able to benefit from a wider choice of destinations while new global connections will boost inbound tourism.

Etihad Airways’ investment of Euro560 million will be provided through a combination of equity injections, asset purchases and other financing facilities and funding arrangements to re-structure the airline’s balance sheet. This is to be complemented by a further equity investment of Euro300 million from existing core Alitalia shareholders, including Intesa San Paolo (Euro88m), Poste Italiane (Euro75m), UniCredit (Euro63.5m), Atlantia (Euro51m), IMMSI (Euro10m), Pirelli (Euro10m) and Gavio (Euro2.5m).

Additionally, up to Euro598 million in financial restructuring of short and medium term debt has been provided by financial institutions and existing bank shareholders. Euro300 million of new loan facilities have also been extended by Italian financial institutions.

Etihad Airways will take a 49 per cent shareholding in Alitalia, for an investment of Euro387.5 million. Its total investment also includes Euro112.5 million to acquire a 75 per cent interest in Alitalia Loyalty Spa, which operates MilleMiglia, the airline’s frequent flier programme, and the purchase by Etihad Airways of five pairs of slots at London’s Heathrow Airport valued at Euro60 million. The slot pairs will be leased back to Alitalia on an arm’s length basis. The transaction is due to be completed on 31 December 2014.

Completion of the equity investment remains subject to completion by Alitalia and its key private and public stakeholders of certain conditions precedent and is also subject to final regulatory approvals.

Etihad Airways President and Chief Executive Officer, James Hogan, said: "For Etihad Airways, this is a strategic, long-term commercial investment. On completion, we are committed, with the other shareholders, to build a reinvigorated Alitalia as a competitive, sustainable and profitable business that can operate successfully in the global air travel market.

"We believe in Alitalia. It is great brand with enormous potential. With the right level of capitalisation and a strong, strategic business plan, we have confidence the airline can be turned around and repositioned as a premium global airline once again.

"Alitalia is the perfect ambassador for Italy and all that it represents. As we revitalise the brand, the airline will increasingly embody all that we recognise as quintessentially Italian – the history, culture, food and fashion. It must be an airline of which Italians can be proud.

"However ultimately it has to work as a business and the goal is for sustainable profitability from 2017." Mr Hogan said he recognised that many steps had been taken by current Alitalia shareholders, management and workers to stabilise the business ahead of new investment.

"Alitalia can succeed and it can grow again but it needs to build from solid foundations. We have made it clear from the start that our entire investment should be focused on supporting the implementation of the new business plan, which will see this goal come to fruition.

"The winners from this successful strategy will be Italian and international travellers, who will see better service, new routes and greater competitive choice; Alitalia’s employees, who can look forward to a brighter future over the long term, in a business which will grow again; and the Italian people, who can be proud once again of their national airline.

"There is a long road ahead, first to complete the transaction and then to deliver this new vision. Today marks a critical step on that journey and we are proud to take our place as a strategic investor in the new Alitalia." Gabriele Del Torchio, Chief Executive Officer of Alitalia, said: "This is an excellent outcome for Alitalia. We have had to take some tough decisions in a very robust negotiation process but we have achieved the consensus we require to create the right shape and size for Alitalia in the future.

"This investment will provide financial stability and enable us to position Alitalia, and the travel and tourism industry in Italy, for long-term growth.

"And for this important result I’d like to thank all the Alitalia staff - men and women, managers and workers, pilots, crew and office staff – who have worked with passion and commitment for our new launch. The transition to a sustainable and profitable Alitalia has required tough decisions but we all share the conviction that this new beginning, oriented towards growth, will bring new opportunities for everyone." The comprehensive business plan provides for the revitalization of Alitalia’s brand, to embody all the things for which Italy is renowned – food, fashion, culture and lifestyle – in a ‘Made in Italy’ premium service concept and guest experience.

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