Lufthansa Italia takes first step in Malpensa battle

By Graham Dunn

Having opted against investing in the reinvented Alitalia, German Star Alliance carrier Lufthansa has embarked on its move to stake a claim at Milan's Malpensa Airport by beginning operations with its new Italian airline, Lufthansa Italia.

The airline launched on 2 February, initially operating flights to Barcelona and Paris. It will add services to Brussels, Budapest, Bucharest, London Heathrow, Lisbon and Madrid over the next two months.

"This is the first time we have taken the step of starting a new airline from scratch in a foreign market. It is a clear sign of our commitment to the region," explained Lufthansa executive vice-president for services and human resources Karl Ulrich Garnadt during a recent ceremony in Milan to name the carrier's first two Airbus A319s.

"We will start with a comparatively small fleet of six aircraft [A319s]," he says. "We are evaluating further options for further network expansion. We do not exclude further services at a later stage, but we will most probably go through the summer with six aircraft and then evaluate."

Lufthansa first announced its move into Malpensa - for which it initially planned to deploy Embraer 195s through its Italian regional carrier Air Dolomiti - after Alitalia scaled back its operations at Malpensa last year.

"Alitalia has taken the decision to reduce capacity [at Malpensa] and from what we see from the latest schedules, they do not have any intention to change that," says Garnadt.

The new Alitalia, recently relaunched as a merged entity with Air One, has concentrated its Milan services to Western Europe from the city's Linate airport - serving Amsterdam, Barcelona, Brussels, Frankfurt, Paris, London City, London Heathrow and Madrid in its first schedule. While it still serves Paris and Dusseldorf among 14 international routes from Malpensa, most of the routes are predominantly towards the east.

"Now is the time," says Garnadt. "This is a strong signal to everyone in the market, that Lufthansa has a big interest in the region. We think it is the right time to move."

The airline is not alone in seeking to develop at Malpensa. UK budget carrier EasyJet has continued to expand at Malpensa since launching a base at the Milan airport three years ago. It now operates to 18 international destinations, in addition to domestic routes, including a number of routes on which Lufthansa Italia will compete. Italian carrier Eurofly, which is part-owned by Meridiana, has also applied to operate a number of new routes at Malpensa

Lufthansa Italia expects to secure its own Italian air operator's certificate (AOC) by the end of the summer, which would enable it to compete for route rights not covered by EU open skies agreements. While not ruling out future developments, Garnadt says the carrier's initial focus is on key European business destinations and that it will look to leverage its Star Alliance partners both to add more destinations and to offset the loss of Lufthansa's soon to end codeshare with Air One.

"We will add another 126 [weekly] flights [from Malpensa]. This is not the end, but we have taken a conservative approach here," he says. "If you widen the scope to include Star Alliance partners, it's 480 flights per week. It means Star Alliance and Lufthansa Italia together have a very attractive network to offer, especially to the travelling business community of Milan and Lombardy.

"We are already in talks with our other Star Alliance partners on codesharing. I personally think the fact Lufthansa has started Malpensa operations will increase the attractiveness of the airport for other Star Alliance partners and we will see new services here.

"It's disappointing we'll lose the co-operation with Air One," he adds. "But at the end of the day, we will find other solutions. There are various options we have, together with our Star Alliance partners."

The airline is also considering options on possible domestic routes in Italy, including the highly prized Milan Linate-Rome route where the new Alitalia operation dominates.

"Linate-Rome is the business route in Italy. If we got the right to fly Linate-Rome, we would start tomorrow," he says. "Our application has been rejected. We are considering our options."