ROME/ABU DHABI: Etihad has confirmed it is taking a 49 percent share in Alitalia for €387.5 million. The Gulf carrier is also acquiring a 75 percent interest in the Italian airline's frequent flier programme for €112.5 million, and purchasing five pairs of slots at London Heathrow for €60 million.

Alitalia investorsSome of Alitalia's many shareholders are kicking in a further €300 million. They include: Intesa San Paolo (€88m), Poste Italiane (€75m), UniCredit (€63.5m), Atlantia (€51m), IMMSI (€10m), Pirelli (€10m) and Gavio (€2.5m).

Notably absent from the list is Air France-KLM that holds 7.08 percent.

A further €598 million in financial restructuring of short and medium term debt has been agreed with existing creditors and shareholders, coupled with €300 million in new loans.

Should the European Commission not block the deal, the total amount to be spent or guaranteed by Etihad and Alitalia's various creditors will be €1.758 billion.

Etihad CEO James Hogan said if the new plan to build a "reinvigorated Alitalia as a competitive, sustainable and profitable business that can operate successfully in the global air travel market" works, he's expecting Alitalia to be profitable from 2017.

The two airlines plan to develop long haul services to new destinations from Rome and Milan Malpensa as well as expand frequencies to feed Etihad's hub in Abu Dhabi. Long-haul flights from Milan will double to 25 flights a week by 2018 as Alitalia's widebody fleet grows by a third.

The carriers say they plan to re-launch and expand Alitalia's cargo business by establishing a centre of excellence in Northern Italy; investment in handling capabilities at Italian airports; and the optimization of an integrated cargo network.

Hogan added: "Italy is a hugely important market for Etihad Airways, from both trade and tourism points of view....the possibilities when we knit together our network with those of our existing equity partners, including airberlin, Air Serbia, Etihad Regional, Jet Airways, Virgin Australia, Air Seychelles and Aer Lingus, and of course our strategic codeshare partner, KLM-Air France, will provide the most compelling customer offering."