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.