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OA940
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Air Italy question(s)

Wed Dec 05, 2018 7:22 pm

The announcement of MXP-LAX/SFO got me thinking about Air Italy's expansion and future plans

First of all a lot of people seem to love their product, at least on the A330. They have insane cheap fares which is great for us, but I have to wonder, especially on the European routes with the MAX, are 60 euro roundtrips really that profitable for them? I know on long-haul flights they have complimentary service, but is that the case on the MAX? Do they charge for anything? Or do they have complimentary service?

Second, what is their strategy intra-Europe? It would be great to see them fly to more big cities in Europe, but right now their European presence is basically non-existent. They have a seasonal flight to LGW, and some domestic flights in Italy, and that's it. They used to fly to DME but that got cancelled. It's also noteworthy that they have fewer MAXs on order than 787s. I get that competition intra-Europe is fierce, but at the same time if they're hoping to become a major airline (even the flag carrier of Italy as they want to become) they have to start more international services. That would be the hardest part of their expansion, but I think with their ties to QR they can do it.

Are they gonna face any problems in the US? I heard that a couple of days ago several senators signed a letter about them and their ties to QR (because of course they did), though I'm not sure what it's about specifically. How likely is it that there will be measures regarding their expansion in the US?

And finally, regarding the 787s, will they keep the QR configuration or will they have their own cabins? The current config is highly competitive (especially in Business Class). Is there a chance they could add a QSuite type seat on the 787? QR will add a customised QSuite on the 787-9, so could they actually configure IG's 788s like that?
A350/CSeries = bae
 
LIPZ
Posts: 551
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Re: Air Italy question(s)

Wed Dec 05, 2018 10:04 pm

OA940 wrote:
Are they gonna face any problems in the US? I heard that a couple of days ago several senators signed a letter about them and their ties to QR (because of course they did), though I'm not sure what it's about specifically. How likely is it that there will be measures regarding their expansion in the US?


Here below the whole story regarding that matter you are referring to
https://www.cruz.senate.gov/files/docum ... _italy.pdf
 
smi0006
Posts: 1947
Joined: Wed Jan 16, 2008 7:45 am

Re: Air Italy question(s)

Wed Dec 05, 2018 10:27 pm

From an EU network perspective - and I’m not overly familiar with the market, are there any small airlines they could buy? Is there another IG who they could purchase? Otherwise organis network growth seems like a challenge in such a competitive market.

Hopefully they look to at least become a Oneworld connect member giving them connectivity with IAG.
 
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OA940
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Re: Air Italy question(s)

Thu Dec 06, 2018 5:51 pm

LIPZ wrote:
OA940 wrote:
Are they gonna face any problems in the US? I heard that a couple of days ago several senators signed a letter about them and their ties to QR (because of course they did), though I'm not sure what it's about specifically. How likely is it that there will be measures regarding their expansion in the US?


Here below the whole story regarding that matter you are referring to
https://www.cruz.senate.gov/files/docum ... _italy.pdf


So basically standard BS we've seen for the past few years.... Roger that..
A350/CSeries = bae
 
spannacomo
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Re: Air Italy question(s)

Thu Dec 06, 2018 6:34 pm

LIPZ wrote:
Here below the whole story regarding that matter you are referring to
https://www.cruz.senate.gov/files/docum ... _italy.pdf

this letter is a plain aggression to both italy and the EU. I hope someone in rome or bruxelles will take the time to send a complaint letter to the american embassy. Under EU law air italy is an italian and european company, if they want to become leader in the italian transport market that should be none of the business of the US, if they want to fly to the USA in accordance with the open sky treaty, again they should be welcomed by both sides of the pond. Air italy is an italian company, what is this V freedom flights nonsense? Air italy is fully operated in accordance with european law, so what is this qatari subsidies nonsense? This letter is a total nonsense and should be dismissed as such by the american administration.
 
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PatrickZ80
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Re: Air Italy question(s)

Thu Dec 06, 2018 8:29 pm

Regarding their European network, I believe they were planning on a deal with EasyJet. Not sure of the status of that deal, but it would suit them. EasyJet has a large presence at Malpensa which is their home base, so it would be perfect for feeder flights.

Once there were plans for a competing airline called Italian Airways that was supposed to start long haul flights out of Bergamo and using Ryanair as a feeder airline. However after their first announcement nothing was ever heard of them again. Air Italy seems to be after the same business model, only out of Malpensa instead of Bergamo and using EasyJet instead of Ryanair as a feeder.
 
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PatrickZ80
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Re: Air Italy question(s)

Thu Dec 06, 2018 8:39 pm

spannacomo wrote:
this letter is a plain aggression to both italy and the EU. I hope someone in rome or bruxelles will take the time to send a complaint letter to the american embassy. Under EU law air italy is an italian and european company, if they want to become leader in the italian transport market that should be none of the business of the US, if they want to fly to the USA in accordance with the open sky treaty, again they should be welcomed by both sides of the pond. Air italy is an italian company, what is this V freedom flights nonsense? Air italy is fully operated in accordance with european law, so what is this qatari subsidies nonsense? This letter is a total nonsense and should be dismissed as such by the american administration.


True. The fact that they're partially owned by Qatar Airways is irrelevant, they're a European airline.

If it were relevant, it would affect IAG as well as they too are partially owned by Qatar Airways. If Air Italy isn't welcome in the USA because of this, then neither should British Airways, Iberia and Aer Lingus be welcome.

However as you said, the whole letter is bullshit anyway. It finds no legal ground and will therefor be dismissed.
 
AntonioMartin
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Re: Air Italy question(s)

Thu Dec 06, 2018 9:00 pm

Im sure the senator's signing may be due to worries about QR being from Qatar, terrorism etc :talktothehand: ...never mind that terrorists could choose Lufthansa or BA also...
 
AntonioMartin
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Re: Air Italy question(s)

Thu Dec 06, 2018 9:07 pm

I wonder personally how heavy is the name Alitalia to Italians in general and the Italian government and how that will affect, if it does, Air Italy's operations.We are talking about a legend here..not the Marilyn
Monroe of airlines as that would be Pan Am, but the Sondra Bullock, Julia Roberts of airlines perhaps..(not the current Alitalia but the name I mean)

One more thing: Air Italy or Alitalia to SJU or PHX PLEASEEEE!!!!
 
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FCOTSTW
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Re: Air Italy question(s)

Thu Dec 06, 2018 9:20 pm

Air Italy is what in business jargon is called an "opportunity window" taken by QR to get a foothold in the Italy - US transatlantic traffic, in order to compete with EK (in the JFK-MXP market ) and with EY (in the Italy-US market served by AZ). As EY, QR holds a 49% airline stake, factor that allows to pour considerable demands (and funding) into company operations. Indeed, it is mainly due to QR' s expertise if the service levels has drastically improved from the one offered from its previous operator (look at Skytrax reviews prior to 2018), if the corporate image has been improved, and if they can afford to offer the market to such low fares due to its parent company' s good cash flows (1). I am sure that as their transatlantic market share will increase (as it will be with the addition of SFO and LAX), many operating fixed costs per passenger will decrease and they will be able to charge fares at their will. In addition, it is very interesting to notice that they do not follow the LCC approach but they are, rather, a full-service airline.

(1) https://www.qatarairways.com/content/da ... l_2017.pdf

Regarding service to Europe, it is my opinion that as they will improve market share, they will use these routes as feeders for MXP to USA flights, meaning they will add and remove European destinations based on market demand.

Most definitely, it is a new airline (started in 2018) and it will be very interesting to see what the future stores for them. Hopefully, they will drive AZ out of business for good.
 
FirstBizFlyer
Posts: 39
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Re: Air Italy question(s)

Thu Dec 06, 2018 9:55 pm

I fly Air Italy quite a bit between JFK - MXP, as well as Alitalia between JFK/LAX - FCO. Air Italy is quite good, and considering fares for J are around $1500/RT, it really can't be beat. The product is very good - food and service - although the crews aren't as adept with speaking English as the Alitalia crews. On most of my flights, the J cabin has been mainly Italians. I am not sure how Air Italy plans to market itself to Americans, as AZ is the default carrier for SkyTeam/Delta to Italy.

I think the West Coast expansion is good, as well as the addition of 787 aircraft. The hard product isn't as competitive as AZ, although if it does become competitive, we'll probably see Air Italy's amazing fares come up.

I hope only great things for them.
 
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PatrickZ80
Posts: 2941
Joined: Tue Jul 13, 2010 5:33 am

Re: Air Italy question(s)

Fri Dec 07, 2018 8:46 pm

FCOTSTW wrote:
Most definitely, it is a new airline (started in 2018) and it will be very interesting to see what the future stores for them. Hopefully, they will drive AZ out of business for good.


It's not a new airline, only a new name. They were previously known as Meridiana.
 
Waterbomber
Posts: 779
Joined: Sat Jul 09, 2016 11:51 am

Re: Air Italy question(s)

Sat Dec 08, 2018 2:55 am

FCOTSTW wrote:
Air Italy is what in business jargon is called an "opportunity window" taken by QR to get a foothold in the Italy - US transatlantic traffic, in order to compete with EK (in the JFK-MXP market ) and with EY (in the Italy-US market served by AZ). As EY, QR holds a 49% airline stake, factor that allows to pour considerable demands (and funding) into company operations. Indeed, it is mainly due to QR' s expertise if the service levels has drastically improved from the one offered from its previous operator (look at Skytrax reviews prior to 2018), if the corporate image has been improved, and if they can afford to offer the market to such low fares due to its parent company' s good cash flows (1). I am sure that as their transatlantic market share will increase (as it will be with the addition of SFO and LAX), many operating fixed costs per passenger will decrease and they will be able to charge fares at their will. In addition, it is very interesting to notice that they do not follow the LCC approach but they are, rather, a full-service airline.

(1) https://www.qatarairways.com/content/da ... l_2017.pdf

Regarding service to Europe, it is my opinion that as they will improve market share, they will use these routes as feeders for MXP to USA flights, meaning they will add and remove European destinations based on market demand.

Most definitely, it is a new airline (started in 2018) and it will be very interesting to see what the future stores for them. Hopefully, they will drive AZ out of business for good.


EY is no longer with AZ so forget that part.
The TATL market is saturated as it is. Milan has an oversupply on the TATL market so the addition of LAX and SFO is foolish and probably just a move to test the waters on how the politics are going to close in on them.

Replying to others and the OP.
The US senators have a point on many levels.
First of all, Air Italy may parade as an Italian company, but this is questionnable. The majority stake is owned by a foundation (AK foundation) , itself funded by funds in the Middle East. If this is allowed, it's too easy to circumvent the ownership rules and the ownership rules become effectively unenforceable and void.
Second, Qatar is clearly the one in effective control and making the decisions. Beyond pure ownership share %, the share of effective control can become a burden.

Beyond the US senators, with AZ now basically under state control, I predict that any significant expansion of Air Italy will be followed by investigations into the ownership and decision-making structures, insurmountable bureaucracy, limitations all over the place. In other words, Trenitalia's take over of AZ was the death sentence for Air Italy or at least for its mega expansion plans.

The only way Air Italy will be allowed to grow is out of OLB. Italy will not impede that as it will support an economically weak region while only competing against AZ in a limited way, it would be just another competitor in the broader market.
To achieve that, QR would have to take a big risk and upgrade OLB (runway extension, terminal and apron enhancements, etc...) and build a network at a very seasonal hub with a small catchement area, which I don't see them doing. QR were after low-hanging fruit.

Finally, there is a thread dedicated to Air Italy where all these points were already discussed. I suggest to merge them.

As for the Italian Airways project that was being lead by former Air Italy/Meridiana CEO Giuseppe Gentile, I don't see it coming to fruition now with the Italian market about to become AZ-centric.

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