Startup carrier Air One will end Alitalia's monopoly on Milan-Rome, the Italian flag carrier's most profitable domestic route, following increased slot availability at congested Milan/Linate.
Air One, formerly Air Adriatica, will serve Europe's fifth largest route five times a day from end November, with plans to increase to 13 times a day in January. Owned by the Italian construction company Toto, Air One says it will double its fleet, currently consisting of two B737-300s and one B737-200, by April 1996 and has plans to open other domestic Italian routes.
Intense lobbying from the Italian airlines board and major foreign airlines paid off in late October, resulting in the Milan airport authority increasing available slots from 22 to 32 per hour - an increase of 45 per cent.
Air One says that the availability of the slots, coupled with Italy's domestic market opening up to all Italian-based competition, have made it possible to attack Alitalia's dominance in the marketplace. Heading the startup is Giovanni Sebestiani, formerly head of the passenger division at Alitalia. The Italian independent says its goal is to be more than a niche player, and will go for the big domestic markets, focusing on frequencies and quality.
Domestic competition may speed the restructuring programme at Alitalia, which is being advised by Italian merchant bank IMI on its planned recapitalisation and has recently ousted managing director Roberto Schisano.
According to majority shareholder IRI, Schisano's departure was precipitated by a first half loss of L197 billion ($123.6 million) falling far short of the forecasted break even, and by a belief that restructuring was moving too slowly.
One thorn in Alitalia's side continues to be its pilots, although some headway is being made. The pilots extended their no strike pledge indefinitely and it was hoped this would last to year end. Pilots and management have agreed on some individual issues, such as flexibility in working practices, productivity increases and conversion to the B767s, currently wet-leased from Monarch. Still lacking is a formal definition of these specific issues and agreement on salaries.
Alitalia is aiming for recapitalisation towards the end of the year, or early in 1996. The sale of Aeroporti di Roma has netted Alitalia L395 billion, buying some time.
Meanwhile, the senior management shake-up has given Daniel di Giovanni, senior vice president corporate strategy, responsibility for North American alliances, causing a new wave of rumours about possible partners for the carrier in the Italian press. An Alitalia source confirmed it was holding talks with American Airlines but did not rule out strengthening its alliance with Continental.
Sara Guild
Source: Airline Business
