The launch of Etihad Airways’ daily Abu Dhabi–Rome flights is “the next step in a burgeoning relationship with Italy,” according to president and CEO James Hogan, speaking in Rome Wednesday.

Etihad is in the final stages of taking a 49% stake in Italian flag carrier Alitalia. The Abu Dhabi-based airline began its new Rome service Tuesday, using a 262-seat, two-class Airbus A330-200.

Alitalia already operates a 5X-weekly service between the two cities. 

“With our Rome and Milan services, and our existing codeshare relationship with Alitalia, Italy continues to grow as one of our most important strategic markets,” Hogan said. We expect the relationship to develop further, with a process under way which we hope will conclude with Etihad Airways taking a minority shareholding in Alitalia.”

Hogan said, “Airlines are scale businesses … Our minority investments in network partners, coupled with our wider codeshare strategy, are enabling Etihad Airways and its partners to achieve these economies of scale. Alone, neither Etihad Airways nor our network partners can hope to effectively compete against the might of the European legacy carriers and their alliances.  Alone, neither of us would succeed in increasingly competitive markets. But together, we can win by sharing efficiencies and applying best practice, and we can deliver a highly efficient business performance to create and deliver sustainable profitability,” he said.

The new service follows on from last weekend’s agreement from Italian trade unions on plans for Etihad to take a stake, despite the latter carrier’s insistence on substantial job cuts as part of the deal. One union has reportedly since spoken out against the agreement.

According to Alitalia CEO Gabriele Del Torchio, the agreement “is another decisive step in this road map, which I hope will lead to the definition of the strategic alliance with Etihad Airways.”

He thanked the union side for understanding “the urgency and the need to reach an agreement,” which would ensure a future for Alitalia and guarantee more than 11,000 jobs.

He accepted that the job losses required—expected to amount to as many as 2,600 positions—were “painful but necessary.”

Etihad’s infusion of funds “will support the emergence of a new, very competitive Italian carrier.” It is intended that the reshaped Alitalia will concentrate on more profitable long-haul routes.