Germany's Lufthansa and Etihad Airways were in talks possibly to merge the two airlines, Italian newspaper Il Messaggero said yesterday, boosting the German airline's share price.
The paper said both companies had for weeks been examining the possibility of Etihad buying a 30% to 40% stake in Lufthansa through a sale of new shares to the Abu Dhabi state-owned airline.
In a second step, the two airlines would look at a full-blown merger, the paper said.
Any combination of the two would affect loss-making Italian airline Alitalia, which is 49% owned by Etihad and is in the middle of a restructuring that will likely include job cuts and grounding planes.
Lufthansa and Etihad declined to comment on what they described as "speculation".
Lufthansa shares were up by 6% yesterday, topping the DAX index of largest German companies.
Analysts reacted with scepticism to the report, citing foreign ownership rules and questioning the possible benefits for Lufthansa.
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