An Italy Without Alitalia – What Will The Market Look Like Now?

MADRID – “Draghi will intervene or it will be an open fight” said governor Michela Califano of the Democratic party in Lazio. That is only what he is doing now (Baraonda, 2021).

Italy’s current state of aviation is one of peril. Alitalia is in the immediate need of a restructuring after over 75 years where it only made a profit in 1998.

It has lost over 3.7 billion euros between 1999 and 2008 and only now the EU has requested for the company to shut down and be replaced by a new one under the name ITA (Perrella).

The following will mean that ITA will have half the fleet of Alitalia while at the same time holding Rome Fiumicino as its hub offering domestic connecting flights with 52 aircraft while cutting some domestic destinations (Drum).

Supposedly “the collapse of Alitalia would be an opportunity, but also lead to a problem: not there being enough planes to quickly replace the demand.” The following is accoridng to the Corriere’s sources after doing an analysis of Italy without an Alitalia.

They state how the center of the problem was how the “shutdown of the Boeing 737 Max (ordered by Ryanair) complicates any replacement plans”, but this has been proven otherwise with the current growth seen by new airlines and low-costs in the country (Berberi).

Italy is not suffering though under the heels of a broken Alitalia but surely only has become a stronger country thanks to new foreign and regional initiatives.

That is the question. Is the development in Italy’s domestic that we are seeing in today leading up to the demise of Alitalia’s domestic route network?

Wizz Air

During Summer 2020 Wizz Air announced plans to open a base in Milan-Malpensa acting as a competitor to Easyjet and Ryanair’s bases at the airport. Since then the airline has opened bases in Bari and Catania with Palermo to start very soon with over 15 airports served domestically (Wizz).

This takes into account their 30 destinations across Europe, Africa, and Asia served primarily from Milan Malpensa. Jozsef Varadi stated their expansion plans “includes Italy, which will absolutely’ feature more heavily going forward.” considering all the expansion they have already undertaken (Anna.Aero)

EGO Airways

EGO Airways is not the sole airline to enter the market but is due to be the “Breeze” of Southern Europe with a focus on luxury travel and cheap fares only starting at 48 Euros one way with 3 Embraer E190s sourced from WDL Aviation and 3 different bundles on offer either with luggage or without luggage (still with seat choice included in the ticket) (Legal Monitor).

Originally the airline planned to offer connectivity to airlines from a base at Milan-Malpensa but those plans have been put on hold as the carrier takes a new leisure-oriented strategy.

“We want to stay from the beginning in this niche” said Matteo Bonecchi, CEO of EGO Airways to Aviadev. “We have to be flexible”. At the same time they are at an advantage. “We want to focus on markets where LCC’s cannot land , our market is perfect [E190s]” (Aviadev).

The airline has already received support. President of Tourism Musumeci said “Air connections are increasingly a necessity for our Island. And given the Alitalia crisis, the presence of new carriers can only fuel competition, allowing Sicilians to fly at affordable rates” according to La Reppublica.

Marilena Bisio Sales manager at the airline said “The partnerships with reference to airports are very solid and in the name of maximum collaboration, in a promising win-win perspective” (Patane).

In the long term Matteo said the docus will be “Secondary airports linked with the hub” to connect with legacy long-haul airlines while at the same time getting O&D traffic (Aviadev).

Kairos Air

Only founded in January the airlines initial plans are to start flights with 2 Atr-72-600s sourced from Air Nostrum to serve Rome and Milan Linate from its Ancona base. With this the airline aims to have 10 aircraft in total with 50 staff in the future (Testori).

Tanoni one of the main promoters and shareholders of Kairos air after Lorenzo Toto and Natascia Troli stated how Covid “has opened up possibilities for the Linate slot, inaccessible for years.

There are opportunities to fly to Milan, we aim to be certain at the end of the month as well as at Fiumicino, where we plan to land for access to international flights. Without considering that the costs for the purchase or leasing of aircraft have been profoundly reduced” (ANSA).

The airlines initial plans to start in June though will not stick to June as the “ summer period there are no business flights. We will start at the most opportune moment and we are evaluating the best one. In a few weeks we will conclude the reflections to trace our business model” said Tanoni (ANSA).

Volotea

Volotea started operations back in 2012 from Venice (Linkedin). Since then Italy’s domestic market with France has been the center of their strategy.

With the recent announcement of their Olbia base (for the summer season) the airline has over 7 bases in the country with its Venice, Genova, Naples, Verona and Cagliari bases making it their biggest market (Caesy).

In 2018 the airline was the 4th biggest airline carrying passengers domestically (Statista).

The airlines trust and belief in Italy is displayed by the airlines first A320 to be based at is Venice base where it will be used to grow its market share (WEtravel).

Volotea has also added services from Milan Linate to Catania, Lampedusa and Pantelleria which will launch in June 2021.

An Italy without Alitalia: In the making

Source: (Statista)

With the continuous push by airlines such as Wizz Air, Ego airways, Kairos air and Volotea in Italy’s domestic market in addition to the already present domestic italian and foreign carriers such as Blue Panorama, Neos, Easyjet, Vueling, Ryanair and Lumiwings operating in the market the Corriere’s claim of an Italy without an Alitalia as unfeasible is solely unrealistic due to the apparent expansion seen in other cities, growing at a faster rate for domestic connectivity in other cities compared to Rome which has mainly remained stagnant.

At the same time this comes amidst the failure of Air Italy and Ernest only a year ago displaying the fragility seen in the Italian market.

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