The Aga Khan Foundation, through its Alisarda unit, has reached a tentative agreement concerning the proposed sale of a minority stake in Meridiana to Qatar Airways (QR, Doha Hamad International).

"The two parties have agreed upon the pillars of the business proposition, which envisages a reinforcement of Meridiana with the objective of making it a solid player in the very competitive European aviation industry," a statement said.

Earlier this week, Meridiana fly (Olbia) president Marco Rigotti met with Italian Minister of Economic Development, Federica Guidi, and her deputy, Teresa Bellanova, to discuss the terms of a Memorandum of Understanding signed between the Foundation and the Qataris last week.

Media reports indicate that under the proposed plan, which requires Rome's approval, the Qataris will ultimately acquire up to a 49% stake in Meridiana. However for that to occur, a reorganization of the Group's operations must occur: firstly Air Italy (2005) (Milan Malpensa) will reportedly absorb Meridiana-fly owing to its superior financial footing then secondly, lay-offs will be undertaken. Of Meridiana's 1,800-strong workforce, approximately 900 are likely to be laid off local unions have said.

There is also the issue of the allocation of added Pisa, Turin Caselle and Venice Marco Polo slots to Qatar Airways. The Qataris have reportedly conditioned the signing of a final agreement on the allocation of said slots which the Italian Ministry of Transport has thus far been unwilling to do.

In the event the deal does go through, the Qataris will alos gain access to other lucrative assets such as MRO unit Meridiana Maintenance S.p.A and the management of Olbia Costa Smeralda airport.

The agreement is seen as urgent ahead of a June expiration of unemployment benefits currently being paid to 1,600 airline staff. Should the deadline expire with no suitable investor found, the staff will be laid off with Meridiana closed down.

The Aga Khan Foundation (Geneva) has pumped in over EUR600 million (USD654 million) into Alisarda over the past seven years in a bid to keep the airline afloat. Faced with increased competition from low cost carriers, the airline has undertaken a restructuring programme to help trim overheads while improving overall competitiveness.