Etihad Airways and Alitalia have confirmed they are close to agreeing a deal which will see the Abu Dhabi carrier invest in the struggling Italian airline.
The airlines released a statement confirming they are in the “final phase” of a due diligence process, which could take up to 30 days to complete.
"During the next 30 days both companies and their advisors will determine how a common strategy can be developed which meets the objectives of both parties."
The potential deal, which could result in Etihad taking a 49% stake in Alitalia, would increase the Abu Dhabi airline's presence in Europe and provide the Italian carrier with a partner and extra funding.
The Gulf airline has already taken a share of Air Berlin, Aer Lingus and Virgin Australia.