Etihad Airways has announced that it closed a deal with Alitalia to buy a 49% stake in the Italian flag carrier for $516 million (USD), and will buy 5 slot pairs at Long Heathrow and lease them back to Alitalia for $80 million USD.

Alitalia will begin a restricting program that will see the airline reduce its narrowbody fleet and increase profitable long-haul routes with new wide-bodied aircraft.

Also part of the deal, Milan will become a hub for Alitalia again, after Alitalia left Milan a few years ago trying to cut cost and focus on domestic and regional traffic in the hopes of stopping huge losses.

The deal still requires EU regulatory approval.

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