DOHA (Reuters) - Qatar Airways is to buy 49 percent of Meridiana in a move that could bolster the Italian carrier’s ability to compete in the European market.
The agreement was reached at the Farnborough International Airshow and the deal will close in early October, subject to certain conditions, Qatar Airways said in a statement on Thursday.
The airline gave no further detail on the conditions or the price.
Meridiana had asked labor unions to agree to 900 job cuts - nearly half its workforce - as part of a planned partnership with Qatar Airways, a person involved in the talks told Reuters in February.
Last month, the Italian government, unions and Meridiana reached an agreement opening the way for the deal to go ahead.
The agreement included the loss of about 400 jobs and a 20 percent wage cut compared with those stipulated in national collective contracts for the sector, union officials said.
Meridiana, which offers flights to and from the island of Sardinia and other destinations in Italy and elsewhere, is owned by the Aga Khan, a businessman and spiritual leader of the Ismaili Muslims.
“Today, an intense working period starts thanks to this agreement,” Meridiana Chairman Marco Rigotti said in a statement.
“I’m confident that all the Meridiana staff ... will know how to take advantage of this important opportunity to create a new phase for our company.”
The airline is operating under a government-sponsored restructuring plan to help turn it around.
“Partnering with Meridiana would only make Meridiana prosper, grow and actually increase the working population of Meridiana,” Qatar Airlines Chief Executive Akbar al-Baker said in April. “But for the initial period there will be some pain on the part of employees.”
Qatar Airways holds around a 15 percent stake in British Airways parent IAG (ICAG.L) and has been open to making further investments to help to expand its reach.
The Middle East carrier is also considering taking a 25-49 percent stake in Morocco’s Royal Air Maroc, Baker has said.
Reporting by Tom Finn in Doha and Agnieszka Flak in Milan; editing by Jane Merriman and David Clarke