According to a report at Italian daily Il Messaggero, Etihad Airways plans to take a 30-40 percent stake in Lufthansa via a capital increase. According to the newspaper, the two airlines would look at a full-blown merger to create a carrier with 97 million passengers a year as the second step.
A spokeswoman for Lufthansa declined to comment on "speculation". Etihad had no immediate comment.
Any combination between the two would likely have an impact on loss-making Alitalia, which is 49 per cent-owned by Etihad and is in the midst of a major restructuring that will likely include job cuts and grounding of planes.
