Etihad Airways appoints new interim boss as it deals with Alitalia collapse

Etihad Airways has appointed an interim boss, as the Middle Eastern carrier deals with the collapse of Italy's Alitalia, in which it is a major shareholder.

The Abu Dhabi airline named Ray Gammell as interim group chief executive, confirming the departure of current head James Hogan on 1 July.

However, Gammell, the airline's chief people and performance officer, will take up his new role's "full management responsibilities" with immediate effect. He joined the company in 2009.

Italy's flagship carrier Alitalia formally begun bankruptcy proceedings earlier this month, after the airline failed to attract €2bn (£1.7bn) of new cash for its latest recapitalisation programme.

Etihad bought a 49% stake in Alitalia for €1.7bn in 2014, in a bid to turn around the struggling European carrier. A consortium of Italian shareholders hold the remaining 51% in the troubled airline.

Alitalia's placement into administration exposes concerns over Etihad's strategy of building minority stakes in airlines to drive traffic to its hub in the Gulf, where it faces competition from Dubai's Emirates and Qatar Airways.

Etihad chairman Mohamed Mubarak Al Mazrouei said: "Ray will now take full management responsibility for the Etihad Aviation Group, ensure a coordinated group approach, and continue to advance the strategic review that was initiated by the board in 2016 to reposition the business for continued development in what we anticipate being a prolonged period of challenges for global aviation."

European airlines fightback

Middle Eastern airlines, after more than a decade of strong growth, have been hit by declines in regional activity sparked by the sustained period of low oil prices, and a fightback by European carriers such as British Airways and Germany's Lufthansa.

Etihad said it was in "advanced stages" of recruiting a permanent group chief executive, with an announcement expected in "the next few weeks."

Alitalia has rarely reported a profits in its 70-year history and posted a net loss of €199m in 2015, the latest year for which financial reports are available. UniCredit, Italy's largest lender, said last month its losses on the airline amount to approximately €500m.

Italy's government has repeatedly dismissed the possibility of nationalising the airline, which was last put into bankruptcy in 2008 after labour and political opposition derailed a proposed sale.