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Etihad buys 49 percent of loss-making Alitalia

By WTOP Staff

NICOLE WINFIELD
Associated Press

ROME (AP) — Fast-growing Etihad Airways took effective control of Italy’s loss-making national carrier Alitalia on Friday, injecting 560 million euros ($750 million) in a deal that will see the Gulf airline gain access to one of Europe’s major markets.

Etihad, which is buying a 49 percent stake in the Rome-based carrier, said Friday it will restructure Alitalia and even laid out the hope of returning it to profitability by 2017. The overall 1.76 billion-euro deal also involves 598 million of debt restructuring and 300 million from Alitalia’s wide array of smaller shareholders.

Etihad Airways CEO James Hogan announced the three-year plan to completely reboot the Alitalia brand at a press conference, saying it was a strong airline but “a poor business financially” that needed to be turned around.

“If we didn’t believe Alitalia could restructure and win we wouldn’t be here,” he said alongside his Alitalia counterpart, Gabriele Del Torchio. “The sexiest airline in Europe should be Alitalia.”

The two signed the deal making Etihad the single largest shareholder in Alitalia after months of negotiations over debt restructuring, proposed job cuts and other issues that sparked fierce opposition from Italian unions. Airline workers have staged wildcat strikes at Rome’s main airport this week to protest the deal.

But Alitalia announced earlier Friday that it had reached agreement with all of Italy’s main unions to back the deal.

“This is a great result,” Del Torchio said. “It means that everyone believes in this great adventure.”

Del Torchio acknowledged there would be job cuts, but said employees would be offered work in Abu Dhabi.

The deal adds one of Europe’s most recognizable aviation brands to Etihad’s growing collection of foreign investments that also includes AirBerlin, Air Seychelles, Virgin Australia, Aer Lingus, Air Serbia and Jet Airways.

Etihad is owned by the government of Abu Dhabi, the oil-rich capital of the United Arab Emirates.

Hogan said the renewed airline would be able to capitalize on Etihad’s growing conglomerate to reduce overhead and expand reach. Plans call for beefing up Rome’s Leonardo da Vinci airport as a hub, increasing Alitalia’s wide-body fleet by a third, adding more long-haul routes — especially to the Gulf — and trimming back less-performing shorter routes.

The aim, he said, was to take advantage of Italy as a tourist and trade destination while giving Italian passengers greater options for travelling abroad.

Alitalia, which reportedly loses nearly 2 million euros a day, has not been publicly traded since it was taken over by a consortium of Italian entrepreneurs five years ago.

The deal, which is subject to regulatory approval, is expected to be completed Dec. 31.

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Follow Nicole Winfield at www.twitter.com/nwinfield

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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