Alitalia Recovering But Fears Competition
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By Andy Nativi
Alitalia is slowly recovering in terms of load factors and punctuality – 80% of flights on time in May – but is facing two new potential enemies – high-velocity trains and new competition at Milan Linate city airport.
High-velocity trains linking Milan to Rome, considered the airline’s “golden route,” are attracting a wealth of business travelers, which is forcing the airline to improve the service to “premium” level and to lower fares. Also, both the Italian and European antitrust authorities are pressuring Italy to increase operations at Milan Linate by adding new slots that could be assigned to Alitalia competitors.
Domestic carrier Air Italy wants to enter the market, and Lufthansa has tried repeatedly to acquire Linate slots to operate Italian domestic routes. The list of other interested players includes British Airways, Meridiana-Eurofly, Wind Jet and easyJet. Giuseppe Catricalà, head of Italy’s antitrust authority, has proposed to boost Linate slots by 40% from 18 movements per hour to at least 25 and possibly 32.
Alitalia now has 80% of the Linate slots. The antitrust move has been criticized by Enac, the Italian Civil Aviation Authority, which has defended the low traffic volumes at Linate on the basis of environmental and noise issues, as well as safety. But many operators have said the Italian government’s decision to put heavy constraints on Linate is only intended to protect the other Milan airport, Malpensa, since everybody would prefer to operate from Malpensa, if given a choice.
Nevertheless, many international companies are willing to operate from Malpensa on long-range routes, and Italian Foreign Affairs Minister Franco Frattini said 39 countries are discussing new bilateral traffic agreements. Alitalia has instead decided to cut down operations at Malpensa, having declared Rome Fiumicino as its hub, and will concentrate, alongside Air-France-KLM and the other SkyTeam airlines, all its flights in Fiumicino Terminal A. This would happen by 2012. European antitrust authorities are also investigating the slot allocation situation at Fiumicino.
For the time being, this is a preliminary assessment, if the answer obtained will not convince European Union Competition Commissioner Neelie Kroes, a formal inquiry could start, even if the European Parliament has approved a temporary exception to the rule, which calls for the airlines to free slots that have been not actively used during the previous season. The exception has been based on general drop of passenger volumes.
Photo: Alitalia
