As we know, for a long time Etihad was on a money spending spree, as they tried to develop their “Etihad Airways Partners” concept. This was basically their way of trying to create a fourth global alliance by buying stakes in all kinds of struggling airlines around the world.
Well, suffice to say this hasn’t worked out too well. They invested in airberlin, which liquidated. They invested in Alitalia, which has continued to struggle. They invested in Air Seychelles, which restructured. You get the point. 😉
I guess the government of Abu Dhabi got tired of burning money (at least on this), and that’s how Etihad got into the situation they’re now in.
Anyway, as part of Etihad’s investment in Alitalia, in 2015 they bought a 75% stake in Alitalia’s MilleMiglia frequent flyer program, meaning Alitalia retained just a 25% ownership stake.
That has changed as of December 18, 2018. ATW reports that Alitalia has just bought back the 75% stake in the MilleMiglia program from Etihad, meaning that they once again fully own their frequent flyer program.
It’s being reported that Alitalia paid about 17 million EUR for that 75% stake. In 2015 the program was apparently valued at 112.5 million EUR. So if we’re to assume that Etihad paid 75% of that at the time (~84.5 million EUR), they may have just been able to buy back that stake for 80% off.
This might be one of the smartest business decisions Alitalia has ever made. 😉
I’m sort of surprised that Alitalia is in a position where they can spend that kind of cash on buying back an asset. Keep in mind that Alitalia filed for bankruptcy in May 2017. Now it looks like they’ll be taken over by Italian rail company Ferrovie dello Stato, but that deal still hasn’t closed. But I guess with as steep of a discount as they’re getting, it’s all not too surprising.
Etihad tactic sounds just like Swissair during the mid 90’s.
As Mach81 pointed out - Alitalia's 77W is not brand new - it's a former Air Austral aircraft.
The current Italian ultra right-wing government will pump funds into AZ’s accounts for many years to come. AZ’s fate is closely related to, if not even part of Italy’s chronic penis envy issues.
I stand corrected, AZ has 1x 773, formerly with air Austral, leased from AerCap (Ireland. Same leading company of some of the 772s).1
AZ doesn’t have 773s. But fairly old 772s (refurbished) and 330s.
@Alex - calm down... its called bank financing or leasing...sheessh!
@Alex Conway, because they are governent owned ☺
Ben, if Alitalia are bankrupt, and have been for 18 months, how do they suddenly find the money to buy a brand new Boeing 777-300ER ? Did they just find it, or am I missing something
Hmmm..., Bankrupt but can still afford to buy a brand new, 400 Million Dollar Boeing 777-300ER ?
How is this possible, did they just find the money ? Ben, what do you make of this ?
Hmmm, Bankrupt but yet can still afford to buy a brand new, 400,000,000 USD Boeing 777-300ER, How ? Ben, what do you make of this ?
Just to be clear, during that period members were treated to a smorgasbord of Italian and Arabic techniques to seize accounts and leave mileage holders with nothing.
My account was left empty after failing to redeem by the end of 2017. It should be noted that at that time, AZ was the only airline in history raising redemption rates from 40K transatlantic C class to about 2 million miles for the same trip.
OT, sorry! couldn't find an email address to send this to, https://www.bbc.co.uk/news/world-asia-46624293,
18k seems a bit wishy-washy.