( CNN ) -- Fast growing Abu Dhabi carrier Etihad is spreading its wings again by agreeing to a 49 % stake in Italian loss-making airline Alitalia . The two parties put out a brief , joint statement which said they agreed to `` principal terms , '' although the financial details were not disclosed . When the Alitalia board gave a green light to the offer on June 15 , Italy 's Transport Minister Maurizio Lupi said that Etihad would make an upfront investment of $ 760 million and would commit to another $ 700 million by 2018 . There are reports this could be even higher . This represents the biggest foreign stake of a European carrier , taking it to the 49 % limit set by European Commission . Etihad becomes the biggest shareholder . Etihad is expected to cut up to 2,200 jobs as part of the agreement . The company also want to ensure Etihad will not carry an unfair burden of Alitalia 's $ 1.3 billion in debt . Alitalia 's unionized staff have resisted deep cuts over the past decade even though losses continued to mount for the flag carrier . The Italian government along with two major banks , Intesa Saopaolo and UniCredit , stepped in with a $ 680 million recapitalization in 2013 . This reduced the stake of Air France-KLM , which had no desire to pump more money into the operation , to 7 % . Italian officials have indicated that Alitalia is losing about $ 1.6 million a day , well over a half billion dollars a year . In April , Italy 's Finance Minister Pier Carlo Padoan told me it was important for the government of Prime Minister Matteo Renzi to consummate this transaction as a signal the country is open for business . This deal represents the latest move by the Abu Dhabi carrier and its CEO James Hogan to build its network to more than 400 destinations . It has taken positions in seven carriers including Air Berlin , Air Serbia and Aer Lingus in Europe . It has also looked East , with stakes in stakes in Jet Airways of India and Virgin Australia . Etihad would not comment beyond its joint-statement , but Hogan spelled out his strategy during our interview at the Dubai Air Show last November . `` Having that network offering is key . But why do we all have to duplicate our overhead ? '' Hogan said . He pointed to the need for `` centers of excellence '' with the `` lowest unit cost , whether it 's reservations , whether it 's part of training . Cost reduction is as important as exceeding customer expectation . '' The challenge for Hogan is proving his team can turn around loss-makers like Air Berlin and Alitalia , while also picking up passengers for Etihad . Read more from John Defterios : Iraq 's 'new reality ' shakes global oil markets . Read more : Etihad Airways to offer live inflight sports action .
Abu Dhabi carrier Emirates agreed to a 49 % stake in Italian loss - making airline SAS . It is the biggest foreign stake of a European carrier , taking it to the limit set by Airbus . Italian officials have estimated that Alitalia is losing about $ 1.6 billion a day .