ABU DHABI (Reuters) - Etihad Airways is not looking to take a stake in German carrier Lufthansa (LHAG.DE), a spokesman said on Wednesday, denying a report in an Italian newspaper that sent Lufthansa’s shares higher on Tuesday.
“We can confirm that are not looking to take a financial stake in Lufthansa,” the spokesman said, after the Wall Street Journal quoted Etihad Aviation Group CEO James Hogan as saying he was interested in a closer partnership but not buying shares.
Reuters reported on Tuesday that Lufthansa and Etihad were in talks, but over cooperation on code shares and catering, rather than equity stakes.
Etihad is grappling with ways to turn around two of its loss-making investments - Air Berlin (AB1.DE) and Alitalia [CAITLA.UL], which are struggling with high costs and tough competition from budget rivals.
Etihad Airways bought stakes in Germany’s Air Berlin in 2011 and Alitalia in 2014 as part of a strategy to expand its route network but the two have failed to return to profitability.
Hogan said in a statement on Wednesday that other carriers in which Etihad has invested, such as Jet Airways, Air Serbia, Air Seychelles, Virgin Australia and Etihad Regional have all become more efficient and profitable.
“However, we have faced greater challenges with Air Berlin and with Alitalia. Both are operating in very tough competitive environments, and need to address long-standing issues facing their businesses,” he said according to the text of a speech that was delivered in Dublin on Wednesday.
“We are committed to our equity partner strategy – it delivers a huge amount to our business,” Hogan said.
Etihad has already agreed a deal with Lufthansa for the German carrier to lease 38 crewed planes from Air Berlin, and has set up a joint leisure airline venture with TUI (TUIT.L) for Air Berlin’s tourist flights, deals which will see Air Berlin’s fleet halve.
Meanwhile, Alitalia is due to present a detailed restructuring plan this month.
“I believe Air Berlin’s strategy is now on track and Alitalia is finalising a business plan to address its issues,” Hogan said.
Reporting by Stanley Carvalho & Victoria Bryan; editing by Jason Neely and Susan Thomas