LONDON – Ryanair’s Chief Executive Officer, Michael O’Leary, has today said that 12-month-old ITA airways are a business that is set to continue losing market share and will require further borrowing from the Italian government.
ITA was spawned when its predecessor Alitalia went broke amid a dire financial status that was ultimately the end of the Italian national flag carrier.
After 74 years of operation, Alitalia finally shut down for good after existing troubles were compounded by the Covid-19 pandemic and proved to be the final nail in its coffin.
As a business, it cost the government close to 13 billion euros in the 20 years leading up to its demise.
ITA is fully state-owned at present but has been in talks with an American consortium led by equity fund Certares since August regarding a potential stake purchase.
According to Reuters, for a 50% plus one share stake, the fund backed by Air France-KLM and Delta Airlines is said to be willing to pay 350 million euros.
O’Leary said this today at a news conference in Rome, as per RTE: “We are Italy’s flag carrier, so we hope the new government will recognize that and work with us because we want to grow.”
“It cannot compete with Ryanair in Italy and on short-haul routes”, O’Leary continued, adding that Ryanair has a 40 percent market share in Italy and is heading towards 42-43 percent.
This is considerably greater than any of its closest rivals, with EasyJet having 11%, Wizzair, and two other low-cost carriers all having a 10% share. Whereas the apparent Italian national carrier, ITA, only has a mere 9% market share.
Ryanair is Europe’s biggest airline, and Michael O’Leary said that he expects to see its share of the Italian market grow over 50% in the next three years.
Reasons expected to support this share increase are said to be taking some rival’s business and an overall increase in air travel.
At present, Ryanair has a route network of 52 flights into Italy, but as winter approaches, they are looking to increase this by 18, up to 70.
On top of a commitment from O’Leary to inject 1.3 billion euros into the Italian capital’s two airports – Fiumicino and Ciampino, the latter predominantly used by low-cost airlines.
Having just undergone Governmental elections, Italy’s new government is not yet in place. With Georgia Meloni claimed victory and was set to become the country’s first female prime minister.
When all is in place by the end of October, Michael O’Leary is keen to meet with the new team tasked with running the country.
On his agenda will be lower taxes and fewer restrictions; both are integral areas that could support growth in the Italian tourism sector over the next 4 years.
“We think tourism will be one of the real growth sectors in Italy for the next three or four years if the government does sensible things like scrapping the municipal (airport) tax and lifting restrictions on Ciampino,” he said.
The 9.4 million passengers Ryanair hopes to transport to Rome by 2023 will make up a percentage of the overall 56 million passengers Europe’s biggest low-cost airlines hopes to transport in total by the end of next year.