MIAMI — A plan to reinvent Italy’s flag carrier, Alitalia, unveiled by its new executive team and investors including Etihad, promises new routes, new product and service standards, a new cost management strategy and new branding.
As part of Alitalia’s new direction, James Hogan, president and CEO of Etihad Aviation Group and vice chairman of Alitalia, said that the carrier, which has long been financially troubled, would be profitable by 2017.
Europe’s airlines completed deregulation, which included a ban on government subsidies by the European Union, in 1997. Under deregulated skies, carriers no longer had their markets protected, which allowed carriers to fly within Europe’s borders without restriction.
This led to stronger carriers like Lufthansa and British Airways, along with new-entrant airlines, to move in and squeeze out weaker airlines, like Malev Hungarian, Greece’s Olympic Airlines, Belgium’s Sabena and Swissair. The previous iteration of Alitalia, which was bankrupt, merged with Air One in 2008.
Between 1999 and 2013, the carrier lost more than €4.3 billion ($5.9 billion) despite more than €2 billion ($2.7 billion) in state aid, and more than €6 billion ($8.2 billion) in total investment. A quarter of the new company was sold to SkyTeam partner Air France-KLM in 2009. In August 2014, Etihad Airways took a 49 percent stake in Alitalia
The Road Ahead
Under the new network, Alitalia will operate out of three hubs: Milan Malpensa, Milan Linate and Rome Fiumicino. Malpensa will handle long-haul flights, while Linate will increase connecting flights with Alitalia’s partner airline hubs.
Rome will continue to expand short- and medium-haul flying and add more long-haul routes to destinations including Berlin, Dusseldorf, San Francisco, Mexico City, Santiago, Beijing and Seoul, along with increased flights to New York, Chicago, Rio de Janeiro and Abu Dhabi.
The carrier will also add 13 weekly flights from Milan Malpensa, with daily services to Abu Dhabi, four flights a week to Shanghai and additional flights to Tokyo. The change is designed to boost the Italian carrier’s connectivity with Etihad’s Abu Dhabi hub.
While Alitalia will remain in the SkyTeam alliance and deepen its relationships with members Air France/KLM and Delta, it will also form major new partnership with airberlin and Niki. And naturally, it will increase connectivity with Etihad, along with Air Serbia and Etihad Regional.
Alitalia’s current fleet is comprised of 118 aircraft, including: 10 Boeing 777-200 LRs, 12 Airbus A330-200s, 12 Airbus A321s, 42 Airbus A320s, 22 Airbus A319s, five Embraer 190s and 15 Embraer 175s.
Alitalia is handing over 14 Airbus A320s to airberlin while looking for options with Etihad to acquire additional wide-body aircraft out of the parent company’s existing fleet orderbook. Etihad currently has three Airbus A319s, 23 A320s, three A321s, 22 A330-200s, six A330-300s, four A340-500s, seven A340-600s, one A380, five 777-200LRs, 11 777-300ERs and one 787-9.