Etihad Airways and Alitalia have entered the final phase of a due diligence process about a possible investment in the Italian carrier, James Hogan, president and CEO of Etihad and Gabriele del Torchio, CEO of Alitalia, confirmed.

The deal could involve Etihad buying a 40 per cent stake in the troubled Italian carrier for as much as €300m ($404.6m), according to Reuters.

Both companies and their advisers will determine how a strategy can be developed in the next 30 days.

“Any issues that may prevent the establishment of an appropriate business plan will have to be resolved to ensure the plan can be implemented to move Alitalia to sustainable profitability,” the companies said in a statement.

In 2013, the Italian government engineered a rescue plan to keep Alitalia flying while it searches for a new partner to help in its revival. Negotiations over a cash injection with the loss-making carrrier’s top shareholder, Air France-KLM, broke down in November.

Etihad, which is buying stakes in airlines around the world to rapidly increase its international reach, could help Alitalia avert bankruptcy.

Since December 2011, when Etihad purchased 29 per cent of Air Berlin, it has bought stakes in Air Seychelles, Irish flag carrier Aer Lingus, Virgin Australia and India’s Jet Airways.

The carrier has also been more active in signing codeshare agreements, with nearly 50 deals signed to date, compared with 12 each by Emirates and Qatar Airways. Etihad also has majority ownership of Air Berlin’s frequent flyer programme.

But it is a strategy that is filled with risk. Some airlines it has bought stakes in may take several years to turn around, and codesharing deals can be damaging to an airline’s brand if the standards of service offered by the partner airline fail to match those associated with the company from which the passenger has bought the ticket.