November 6, 2014 / 11:36 AM / 5 years ago

UPDATE 1-Alitalia picks ex-Ferrari boss as chairman, Etihad man as deputy

* Appointments effective once Etihad-Alitalia deal cleared

* Montezemolo seen as key to boost Alitalia’s global image

* Alitalia-Etihad deal still subject to European approval (Adds details, context, analyst)

By Alberto Sisto

ROME, Nov 6 (Reuters) - Alitalia has lined up former Ferrari boss Luca Cordero di Montezemolo as chairman and Etihad Airways CEO James Hogan as his deputy in the new company that will be formed when the Italian airline ties up with the Abu Dhabi-based carrier, two sources close to the matter said on Thursday.

The sources said the two had not been formally appointed because the deal, under which Etihad has agreed to buy 49 percent of loss-making Alitalia as part of a 1.76 billion euro ($2.2 billion) rescue plan, still needs approval from European authorities to be officially signed off.

“Yesterday, the board of the old Alitalia designated Montezemolo and Hogan who will eventually be nominated by the board of the new company,” one of the sources said.

Alitalia and Etihad declined to comment.

While Montezemolo has long been seen as a candidate to be chairman at Alitalia, the appointment of Hogan as his deputy will likely fall under the scrutiny of European authorities which require that no airline from outside Europe controls a European carrier.

“From a business point of view, having someone like Hogan, who has proven himself in the airlines sector, is definitely a plus and shows Alitalia is serious about wanting to restructure the carrier,” said Andrea Giuricin, a transport analyst at Milan’s Bicocca university.

He said that as long as operational powers remained with the chief executive or chairman, the European Commission should not object to the appointment.

Hogan joined Etihad in 2006 and has expanded it through acquisitions of minority stakes in about nine airlines globally.

“He is focused and determined to achieve his goals and has proven that in the last few years,” said one Etihad insider who has worked with him.

In September, Alitalia designated Silvano Cassano as new chief executive after current CEO Gabriele Del Torchio said he would step down following a deal with Etihad.

Montezemolo, one of Italy’s best connected and most colourful business leaders, who stepped down as Ferrari chairman last month, is seen as a major boost to Hogan’s bid to revitalise a brand which he once described as the “sexiest airline in Europe”.

“Montezemolo is well recognised in business circles worldwide so having him as chairman is definitely a success and will help build a strong brand image,” Giuricin added.

Montezemolo will succeed Roberto Colaninno who decided not to continue in his role after the deal.

The European Commission has said it would decide by Nov. 17 whether to clear the Alitalia-Etihad deal.

A union with Etihad will bring Alitalia money to invest in more profitable long-haul routes and make it less reliant on domestic and regional services where it has struggled to compete against low-cost airlines and high-speed trains.

The Gulf carrier already has stakes in Air Berlin and Ireland’s Aer Lingus, among others, and investing in Alitalia will help it expand in Europe.

1 US dollar = 0.7994 euro Additional reporting by Agnieszka Flak in Milan, Francesca Piscioneri in Rome and Stanley Carvalho in Abu Dhabi; Editing by Mark Potter

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