Alitalia-Etihad deal to close this week, minister says

Lupi tells Lower House investor near deal with Italian carrier

(ANSA) - Rome, April 2 - A deal between struggling Italian carrier Alitalia and Abu Dhabi-based Etihad Airways should go through this week, Italian Transport Minister Maurizio Lupi told the Lower House on Wednesday. "I think this week, as announced, the work carried out in the past few months will reach a conclusion," he said. Lupi said last week that Etihad would shortly decide whether to buy a stake in Alitalia. Talks are ongoing over whether the Gulf carrier, which is vying to broaden its network in Europe, could buy up to 40% in the troubled Italian airline.

In early February, Etihad and Alitalia issued a joint statement saying they were in the "final phase" of negotiations for a deal that would see the Abu Dhabi carrier buy as much as a 40% stake in its Italian counterpart, the equivalent of a much-needed capital injection of 350 million euros. But the arrangement, as well as other plans to bring Alitalia back to profitability, have been controversial. In addition to Lufthansa's competition, the owner of British Airways has said that a plan coordinated by the Italian government to rescue Alitalia triggered the same concerns.

The complaints came as Alitalia was poised to sign a 200-million-euro financing deal with banks as part of a 500-million-euro bailout package engineered by the previous Italian government last autumn. This also included a controversial 74-million euro investment by Italy's state-owned post office Poste Italiane.

International Airlines Group (IAG), the holding company that owns British Airways, Iberia and Vueling called that a form of protectionism and is illegal under EU laws governing state assistance to businesses.