Air France-KLM Plans to Let Share of Alitalia Wither in Wake of Etihad Share Approval

Air France-KLM intends to allow its share of Alitalia to dilute after Etihad received clearance to purchase 49 percent of the Italian airline.

Air France-KLM, the parent company of both Air France and KLM Royal Dutch Airlines, said it will allow its share in Alitalia to dilute while maintaining their partnerships. Reuters reports that the plan was announced at a meeting of the European American Press Club.

The comments come just days after Etihad Airways was given clearance by the European Commission to move forward with its acquisition of a 49 percent stake in the Italian airline. The National reports that the deal is expected to be finalized by the end of 2014.

As part of the deal, the parent company of the flag carriers for France and The Netherlands said they will allow their stake in the Italian air carrier to be reduced. Reuters reports that the company has already allowed the Alitalia share to dilute from 25 percent down to a 7 percent stake. While Air France-KLM has not announced what it expects their new share to be in the Etihad-controlled Alitalia, the company remained optimistic about maintaining partnerships with the airline after the deal is complete.

“We’re going to allow our stake in Alitalia to be diluted,” Air France-KLM CEO Alexandre de Juniac told the European American Press Club. “[All] whilst hoping to maintain our partnerships, which function very well.”

Air France, KLM and Alitalia are all members of the international airline alliance SkyTeam. The National reports both Alitalia and Etihad are expected to benefit from access to the SkyTeam network, as well as the launch of Etihad Airways Partners.

[Photo: Alitalia]