Etihad CEO says no plans to invest in Lufthansa

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Bloomberg

Etihad Airways PJSC has no plans to take a stake in Deutsche Lufthansa AG, though the carriers are exploring the possibility of expanding their recent cooperation agreement, according to James Hogan, the company’s chief executive officer.
Asked if Abu-Dhabi-based Etihad would be buying Lufthansa, for which it has been touted as a possible investor, Hogan replied “no.” The CEO, who spoke after addressing a conference in Dublin, said the companies are instead discussing the deepening of a code-share deal announced in December.
Lufthansa shares had their biggest intraday jump in almost three months Tuesday after Italy’s Il Messaggero newspaper said that “high-level talks” were underway that could see Etihad buy as much as 40 percent of Europe’s third-biggest airline via a capital increase.
The CEO said Etihad remains “committed” to a so-called equity alliance that has seen it take minority stakes in a range of often struggling carriers worldwide, Air Berlin Plc and Alitalia SpA among them.

‘Italian Solution’
Alitalia, which has also been linked to a possible combination with Lufthansa, requires an “Italian solution,” Hogan said. The CEO and executives from the Rome-based company met with Italian ministers Jan. 9 to discuss the latest cash crisis and agreed to submit “a detailed industrial plan” within weeks.
Lufthansa and Etihad said in December they’d agreed to share seat sales on four routes in the wake of a separate deal that will see the German carrier lease 38 aircraft from rival Air Berlin, which is struggling with mounting losses.
Hogan said in Dublin that Air Berlin needed “radical change” from the start, and that the European Union should ease ownership rules to allow outside companies to take majority holdings in its airlines to ease access to capital.
The cap bars non-European operators from owning more than 49 percent of EU airlines and would also limit any stake Etihad might take in Lufthansa, especially since a 30 percent investment would trigger a mandatory takeover bid under German law that would in turn jeopardize route rights.

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