MADRID – As another Italian carrier looks to be brought back from the dead, a potential buyer of the debt-stricken Air Italy has said that the Airbus A321LR/XLR will be the best option for long-haul and the Sukhoi SuperJet for the short-haul.
Since the airline’s shutdown on February 11th, 2020, after Qatar Airways and the Aga Khan Group pulled investment, there have been countless protests across the country about the firing of Air Italy’s 1350 staff up until today, over a year after the carrier’s failure.
Secretary Anpav Marco Bardini of the employee group said to GalluraOggi, “We asked the government representative that Air Italy workers have equal dignity with all other workers in the sector and that they can therefore benefit from the extension of the existing CIGS, pending the resumption of the air transport market and the restart of the national air transport industry.”
“We also gave the Deputy Minister Alessandra Todde the opportunity to seek private industrial partners who will take over the assets of the Sardinian company, in order to favor the birth of a regional carrier that operates territorial continuity to and from Sardinia, employing staff stationed in Olbia and Malpensa “.
With this in mind, the carrier has acquired interest from two groups being one British and one Russian. AviationSource in this case had the pleasure of interviewing Oleg Evdokimov, CEO of ATEO group (formed in 2004 as a holding working with aviation clients and officially becoming a company in December 2020 with the aim of managing airline projects in the post aviation world) who holds a big interest in taking over the airline.
Discussing the Future of Air Italy
LZ: Mr. Evdokimov, thank you so much for speaking to AviationSource. Can you first of all confirm interest in the Air Italy Air Operator’s Certificate or are you only interested in the company’s assets?
OE: Yes, it is my pleasure to confirm our intention to revive Air Italy based on whether it gets certified and its experienced staff with modern expertise. It is important to know that I am the “Godfather” of the Air Italy project as of June 2017. Immediately after the start of the Qatar crisis, I published an article – “Qatar Airways” – what to do as a solution to the problem, it was proposed to relocate the company’s fleet, in particular to Europe, by creating joint ventures with Europeans. The advice was received by His Excellency Akbar Al Baker and Air Italy was established in February 2018. In the end, the carrier failed under their focus on the use of B737MAX to build a hub at Malpensa while flying flights to North America practically empty.
LZ: What experience do you and the group of investors represent in air transport? Are you in an investment fund?
OE: ATEO has existed since 2004 as an airline expert company and I believe that I have sufficient experience to manage the process. We cooperate with investment funds and banks. And we are open to any meaningful partnerships. We are also the authors for the development of new frequent flyer programs and cooperation with manufacturers such as Airbus and Sukhoi. An example of this is Airbus, who in particular, prepared for us the 60C + 60Y (biz class + eco class) configuration for the A321LR, which is obviously the best in the post-pandemic period.
LZ: Have you made any proposals in the past for the acquisition of airlines? If so, which ones?
OE: Yes, we have advised several of these processes, applied for acquisitions, developed plans to restart companies themselves, or together with partners including Germania (Germany), Cobalt (Cyprus), Jet Airways (India) and Adria Airways (Slovenia) which failed in 2019.
LZ: Do you have a business that could gradually reabsorb this staff?
OE: Competent, well-trained, and highly motivated staff is one of the key factors for the company’s success. We highly value the Air Italy staff, their dedication to their business, and their company. The plan to restart the company involves the use of several dozen aircraft and a wide route network both in Italy and abroad. Accordingly, there will be a need for appropriate personnel and obviously the Air Italy’s employees will be the first and the best choice.
LZ: The airline Air Italy has accumulated more than one billion in debt over the past few years. How do you plan to relaunch it?
OE: We are supposed to pay special attention to the economic feasibility of routes and the selection of appropriate aircraft. In particular, taking into account the factor of the decline in traffic, the most optimal for the majority of domestic routes are aircraft with a capacity of 80-100 seats. On international routes, it is planned to focus on long-range narrow-body aircraft, such as the A321 LR/XLR.
LZ: What would Air Italy’s target market be in the event of your acquisition? Could the base remain in Sardinia in Olbia?
OE: Air Italy has been a major player in the Italian domestic air travel market. Of course, it will remain so. The Italian domestic market is now of great interest, however, work on the international market is also planned. The plan provides for both a base in Olbia and in other cities, for example, Milan.
LZ: How will Air Italy compete against the likes of low-cost airlines such as Ryanair, Easyjet, Wizz, and Volotea which just announced it would be opening a base at the airport this Summer?
OE: One of the key factors in the success of low-cost airlines is the maximum use of the carrying capacity, in other words, they must fill the entire plane, and not only with “promotional” tickets for 1 euro, but mainly at a more adequate price. Another condition is the uniformity of the fleet, and all real low-cost airlines have unified their fleets with planes of 180-200 seats. Now let’s turn to statistics. In 2020, the average aircraft load was 104 passengers in Cagliari, 97 passengers in Alghero, and 109 passengers in Olbia. That is, despite the more than 2-fold reduction in the number of flights and directions, the load is 50%.
What can traditional low-cost airlines do in such conditions? Take a few destinations and cut the number of flights on them in half to ensure “normal” load factor? What is the result? – Even fewer destinations and even less frequent flights? Is this the path to restoring normalcy? And we propose to solve the problem by using the correct aircraft. SSJ-100 has a capacity of 93-98 seats, i.e. it fits the situation optimally. Market recovery is forecast to be slow. But in our case, the recovery will occur due to the restoration of directions and frequencies of flights, instead of a long wait and inconvenient flights with numerous transfers.
LZ: Why have you chosen the SSJ- 100 aircraft as the core of your fleet? Are you looking for other aircraft types to be part of your fleet?
OE: It’s the best regional plane in my opinion. We will use A321LR later on for long-haul flights and will bring together the full-service model we aim to adopt into the business going forward.
Will it work?
Following our interview, Oleg published on his Social media the initial routes the carrier plans to fly from Olbia with a Sukhoi fleet. This will all be based on the approval of the airlines certification process.
Anonymously, one of Air Italy’s staff spoke with us regarding Oleg’s interest in the company who said to us:
“As an airline that has, unfortunately, had negative experiences with false investors who have made vain promises, we are very skeptical more than anything else. I personally have spoken with Oleg, thanking him for his interest in the company, and he replied saying that he loves Italy and would like investing in this country, making it seem sincere to me.”
The employee continued saying “Air Italy employees would like a serious investor who knows how to carry out serious projects in Italy with professionalism, Air Italy is the sum of three airlines with different histories but which have high-level Italian training in common (as only in Italy exists). Investing now is certainly an excellent idea, investing now in an Italian airline is very risky but without a doubt if the project were to be well structured and followed, I find it to be an excellent investment”.
Only in due time will we see the truth regarding the Air Italy controversy as Alitalia gets hammered by the European Union and low-costs expand into Italy especially in the domestic market and to the likes of Olbia (see related article).
- Slotnick, David. “Air Italy Will End Operations and Liquidate, Becoming the Latest Airline to Fail.” Business Insider, Business Insider, 11 Feb. 2020, www.businessinsider.com/air-italy-to-liquidate-and-end-flights-latest-airline-bankruptcy-2020-2?r=DE&IR=T. Accessed 25 Apr. 2021.
- “Roma, I Lavoratori Di Air Italy in Piazza Contro I Licenziamenti.” Gallura Oggi Il Quotidiano Di Olbia E Della Gallura | Notizie Da Olbia, Eventi in Gallura, 14 Apr. 2021, www.galluraoggi.it/economia/lavoratori-air-italy-roma-manifestazione-cassa-integrazione-sindacati-14-aprile-2021/. Accessed 25 Apr. 2021.
- Ateoair.com, 2021, www.ateoair.com/. Accessed 25 Apr. 2021.
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- Liefgreen, Dan. “Qatar Airways, Aga Khan Decide to Liquidate Troubled Air Italy.” Bloomberg.com, Bloomberg, 11 Feb. 2020, www.bloomberg.com/news/articles/2020-02-11/qatar-airways-aga-khan-decide-to-liquidate-troubled-air-italy. Accessed 25 Apr. 2021.
- “LinkedIn.” Linkedin.com, 2021, www.linkedin.com/in/oleg-e-40151539?originalSubdomain=cy. Accessed 25 Apr. 2021.