Hogan cools talk of Etihad interest in Alitalia

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Etihad chief executive James Hogan has distanced the carrier from media speculation about the possible purchase of a stake in Italian flag carrier Alitalia.

The four-year lock-in on Alitalia's domestic investors has just expired, and the Gulf carrier had been tipped as a possible buyer in the market. Over the past 12 months, Etihad has acquired minority stakes in European carriers Air Berlin and Aer Lingus, as well as developing a partnership with Alitalia's biggest shareholder, Air France-KLM.

But Hogan dismissed the reports at a press conference in Amsterdam on 15 January, instead unveiling details of the next phase of Etihad's co-operation with KLM. "I read about it too. It was the first I had heard about it," he said when asked about possible interest.

The Italian carrier is one of Etihad's 41 codeshare partners, and Hogan acknowledges the value of its network partnership with the airline. "It [Alitalia] is operating into Abu Dhabi and linking with us to Southeast Asia and Australasia out of Rome," he notes. "We operate into Milan. The Italian market is the fourth largest market in Europe. It's an important market."

But Hogan adds: "We haven't had any discussions about equity in Alitalia."

Elsewhere, though, talks are continuing with both Jet Airways and Kingfisher Airlines, after India raised the cap on foreign ownership of local carriers to 49% in September. "India is on our doorstep. We are examining the new foreign direct investment legislation. We are in due diligence. But as with any potential deal, it is not done until your due diligence is done," says Hogan.

Etihad already has a strong presence in the Indian market and Hogan sees an opportunity for further development. "Most European and American carriers fly into Mumbai or Delhi. We fly into a whole range of secondary cities [in India] and that will grow. And the ability between India and Abu Dhabi to create an air bridge is as attractive to us as it is the people we are talking to," he says.

The Gulf carrier has also acquired stakes in Air Seychelles and Virgin Australia as part of its partnership strategy.

"Our strategy about investment is very measured," Hogan says, emphasising the need for demonstrable network benefits in any such deals. "We are looking at ways of how we can improve each other's respective business, but what we are not going to do is take over someone's problems. So its about network, its about synergies," he explains.

"This isn't about control. It's about working smarter, and that's what we are doing."