MIAMI — Italy’s hope to one day have a healthy and potentially profitable flag carrier is still alive. Qatar Airways (QR) has just announced the acquisition of 49% of Meridiana’s parent company, AQA Holding.
The deal comes through a few days after Ryanair pulled out of its non-binding interest in the country’s largest, ill-fated Alitalia, leaving a large question mark on the future of Italy’s historic flag carrier.
Meridiana (IG), the small carrier based in Olbia, Sardinia, has long been in trouble with an indefinite business plan and the uncertainty of a country that hasn’t been able to produce a profitable airline operation.
The deal sees a 49% purchase of AQA Holding, while Alisarda—the former lone shareholder—will keep the remaining 51%, as mandated by European regulations. The value of the deal was not disclosed by either party.
“We are delighted to formalize this important partnership, which will help increase Meridiana’s competitiveness in the European market,” said Qatar Airways CEO, Akbar Al Baker.
“We look forward to working together to reinforce its position to provide even more connectivity to Italy and other European destinations, as well as those in the US and beyond.”
Currently, Qatar Airways flies from Doha to Milan-Malpensa (MXP), Venice (VCE), Rome-Fiumicino (FCO), and Pisa (PSA) 42 times every week—a figure that’s expected to increase once both airlines streamline their operations.
Promise kept, time to work.
After a relatively long wait, Al Baker came through with his promise of investing in Italy’s second-largest carrier. Back in July 2016, the CEO noted that his airline would invest in Meridiana as long as large lists of conditions were met.
A cut of 20% of Meridiana’s workers (approximately 400) was first in the list, followed by numerous operational changes and EU approval of the transaction.
“Qatar Airways will continue its business expansion around the world,” said the controversial CEO.“We will increase our passengers’ travel options and also our investment portfolio. But we’re not a charitable organization, people need to earn their jobs,” he said.
In an interview released by the Italian newspaper Corriere della Sera, Al Baker revealed that his interest in Italy sparked because “the country doesn’t have a true flag carrier,” taunting at his Abu Dhabi-based competitor, Etihad Airways, and its investment in Alitalia.
The Qatari CEO believes that even though Italy is a strong tourist destination, travelers come into the country with non-Italian airlines.
“This doesn’t make any sense,” he enthused. “Tourist destinations are currently served very poorly by Italian carriers.”
And even though FCO has recently inaugurated a brand-new, top-class terminal, Al Baker blamed Italy’s current hub infrastructure, calling it inefficient and well below competing gateways like Paris, London, and Frankfurt.
Al Baker also criticized Meridiana’s current setup and noted that for an airline to be successful, “it cannot fly to key Italian destinations just a couple times a week.”
Adding fuel to the fire, Al Baker revealed that, unlike his competitors, he doesn’t invest in airlines that don’t meet his standards. “We invested in IAG because they met our requirements. Same thing happens with LATAM Airlines,” he said.
Meridiana: New airplanes, destinations
Qatar Airways’ influence in Meridiana will be paramount, as noted by Al Baker. According to him, the new airline will have to look beyond Italy’s frontiers, not leaving behind a strong growth in the domestic market.
Meridiana’s transformation from an obsolete, unprofitable airline, to a Qatar Airways-powered carrier, will see the inclusion of brand-new airliners that will consent Meridiana to rapidly expand its domestic and international operations.
Currently, the Italian carrier has eight Boeing 737-700/800s, four 767-200/300s, and seven McDonnell-Douglas MD-82s, all with an average age of 22 years in service.
Al Baker promised that a batch of 20 brand-new Boeing 737 MAX 8s that were ordered at the Paris Air Show 2017, will come in to replace the airline’s aging fleet. It remains unclear, however, which widebodies will come in to replace the 767s.
According to the CEO, the initial goal is to improve connectivity between Italy, the United States, and other European destinations, through a combined, collaborative operation.
Even though a formal plan for Meridiana’s re-birth is still to be heard, the potential is there. In the upcoming days, a new CEO will be appointed, as noted by Qatar Airways in a press release.
Meridiana, founded in 1963 as Alisarda SpA, launched with the purpose of connecting the island of Sardinia with mainland Italy and other international destinations.
The airline began scheduled operations in 1964, later accomplishing its first international flights to Paris, London, Frankfurt, and Barcelona.
In 1991, Alisarda adopted the name Meridiana, which later changed to Meridiana Fly once the airline merged with Eurofly, an Italian long-haul charter operator.
The combined carrier also acquired Air Italy, a charter company that ultimately merged into the Meridiana brand in 2013. Once all three operations were fully combined, the airline’s corporate identity changed to today’s Meridiana SpA.
Meridiana began linking the three Sardinian airports in Olbia, Alghero, and Cagliari with other Italian and European destinations.
A further expansion launched flights to European holiday and even long-haul destinations from Milan, Rome, and Naples, to New York City and the Maldives.
Long haul destinations were served with Air Italy’s Boeing 767-200/300s and Eurofly’s Airbus A330-200s, all of which were retired in 2014 to transform Meridiana into an all-Boeing operator.
Meridiana began offering an all-new Frequent Flyer Program in partnership with IAG’s Avios, which allowed the airline to expand its international network into new destinations like London, Tel Aviv, Moscow, and Geneva. Reportedly, this expansion sparked Qatar Aiways’ interest, which today is materializing into formal ownership transaction.
The Arab-Italian Landscape
With Qatar Airways consolidating itself as a strong holder in the Italian market by purchasing 49% of Italy’s second largest carrier, competitor Alitalia rapidly approaches the end of a 9-year agony.
Etihad’s lavish investment in failing Alitalia proved to be filled with too much trouble, uncertainty, and endless operational issues that were never positively streamlined.
Alitalia filed for administration in June 2017 and has been put for sale with no concise interest from any takers. Most recently, Ryanair backed up of its non-binding interest, leaving Lufthansa and EasyJet as the last two ‘might-be’ carriers that could possibly extend Alitalia’s life for a little longer.
As things stand, Akbar Al Baker might have played his cards just right by waiting until his biggest Italian competitor could no longer stand on its own, leaving ahead an open field of opportunities.
And even though Meridiana is still in the very early stages of an imminent transformation, Qatar Airways must be patiently waiting for Alitalia’s domestic and international slots, should the airline go bust. And if things materialize this way, Al Baker might conquer one of the luckiest bids in European airline industry.