Thursday, April 28, 2016

Alitalia studying possible stake in Air Malta

Following months of speculation about a possible tie-up with Etihad Airways, Alitalia has come forward and announced it has signed a Memorandum of Understanding (MOU) with the board of directors of Air Malta and the Government of Malta to complete a comprehensive due diligence with the possible intention of becoming a 49% shareholder in the Maltese airline. Alitalia is 49% owned by Etihad.

"There are strong cultural and commercial bonds between Italy and Malta, and this MOU is a first and important step, but we will only make a decision once we have completed an exhaustive examination of a possible deal," Alitalia’s CEO C. Ball said. "We will need to establish unequivocally that a deal with Air Malta will not undermine the progress of our three year turnaround programme, or prejudice our financial position."

Ball added that with Alitalia on track to attain profitability by 2017, there was need to consider future plans hence the interest in Air Malta. As such, given Malta's proximity to Italy, Alitalia will study how Air Malta can compliment Alitalia's strategic growth plans especially in areas such as southern Italy.

"The future of the commercial aviation industry has to be one of consolidation, and for us to prosper we must examine opportunities where we believe we can offer a wider reach for our customers," he said.

Air Malta Chairwoman M. Micallef said the negotiations were at an early stage and the state-owned company would cease talks with other airlines now that an MOU with Alitalia has been signed. The carrier hopes to conclude the due diligence by the end of July, following which the Boards of Alitalia and Air Malta will then make a decision on whether to proceed with an undertaking. (SourceL, 27-Apr-2016)