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Alitalia okays $336million capital increase

Alitalia’s board has approved a €250 million ($336 million) capital increase to save the struggling airline until it can be taken over by Etihad Airways.

The Italian airline has been trying to overcome the final hurdles to sign an agreement for Etihad to take over a 49-per cent Alitalia stake with an investment of €560 million. That has included talks with investors on restructuring debt and with unions on workforce reductions.

The capital increase approved on Friday will come from major stakeholders. The board also approved 2013 financial results but is not making them public. Italian media reported that it racked up losses of €569 million. Alitalia has not been publicly traded since it was taken over by a consortium of Italian entrepreneurs five years ago.

Alitalia has made an annual profit only a few times in its 68-year history and received numerous state handouts before being privatised in 2008.

Etihad already has stakes in Air Berlin and Aer Lingus. A stake in Alitalia, which offers access to Europe’s fourth-largest travel market and flies 25 million passengers a year, would boost its efforts to expand in Europe.