Italy's airline industry is at a crossroads. Long dominated by flag carrier Alitalia, the country's air-transport industry is still coming to terms with the 1995 liberalisation of the domestic market. Despite the dramatic events of the last year or so, most agree that there is still plenty of room for further activity as the final phase of European liberalisation takes effect in April.
The arrival of new, low-cost entrants such as Air One, Air Sicilia, Alpi Eagles, Azzura Air, Minerva Airlines and Noman developed into a pitched battle in 1996 with incumbent Alitalia - resulting in new routes and services and more destinations being offered than ever before. It was a battle from which only Air One and Meridiana emerged still as independent players.
Codesharing deals
Alitalia has now signed codesharing agreements with Alpi Eagles and Minerva Airlines, while Air One, in a deal signed in December 1996, has leased all of the activities of Noman for three years, with the option to buy the airline. Meridiana is now facing major restructuring, due for completion in early 2000.
A typical example of the new entrants is Noman. The carrier was based at Rome's second airport, Ciampino, where it had operated as a charter carrier. In 1996 it opened scheduled services between Milan and Rome, but failed to achieve load factors higher than 35% - its share of the Rome market being just 4%. Noman chief executive Giulio La Starza says that the problem was that Ciampino proved unpopular with Rome-based travellers, who had become used to it as a charter airport.
Air One began operating in November 1995 and has now taken over Noman's operating licence, personnel (about 100 flightcrew and ground staff), fleet (two McDonnell Douglas DC-9-15RCs), maintenance company Italian Technics and the coveted 12 daily slots at congested Milan Linate.
The carrier now plans to increase frequencies on its existing routes, such as Linate-Rome/Fumicino (13 flights per day), and between Linate and Naples and Bari in southern Italy. The last two routes showed traffic increases in 1996 of 17.8% and 37.7%, respectively. On the Linate-Rome route, the increase was also a creditable 23.5%, bringing its market share on this, the most important domestic route in Italy, to 25%.
As the airline which effectively broke Alitalia's domestic monopoly, Air One was without doubt the single most successful new entrant of the year, beginning operations with one leased Boeing 737-200 and two -300s , but closing the period with a further five 737-300s 737s. The airline is confident that its 1996 results will show no losses on total sales of around L140 billion ($95 million).
Air One also has an arrangement under which regional carrier Air Sicilia of Palermo, with three AI(R) ATR 42s, operates wet-lease services on Rome-Bari and the new Bari-Bologna route. Air Sicilia competes with Alitalia on Palermo-Rome and aims to win exclusive rights for the "social" routes to the Mediterranean islands of Pantelleria and Lampedusa.
Alpi Eagles had a less successful year, despite promising far-reaching innovations such as the introduction of a business class on domestic flights (offering fares 20% below those of Alitalia) and ticketless seat sales. Established by a group of industrialists from north-east Italy, the aim was to create a regional carrier operating from Verona and Venice in direct competition with Alitalia and Meridiana.
Now, Alpi Eagles has signed a codesharing deal with Alitalia, covering those routes, and is being incorporated into the national carrier's route structure, while its self-developed ticketless sales system now runs in parallel with a traditional system. It has also been plagued with technical problems, beginning in September, when the door of a Fokker 100 opened on take-off from Venice. Two months later, the Italian certification authorities discovered irregularities in maintenance records (Flight International, 11-17 December, 1996, P11) leading to the entire fleet being grounded. A week later, its four Fokker 100s were returned to service, but the carrier was nevertheless forced to restructure completely. Its president, Ambrogio Delachi, was replaced by Patrizio Casalini.
The prospects
Minerva Airlines of Padua also aligned its future growth alongside Alitalia, using its three Fairchild Dornier 328s to provide feeder services to the flag carrier's Milan hub under a codesharing deal, as well as operating its own services from Bari, Florence, Naples, Trieste and Venice.
The most recent entrant, Azzura Air, with a 49% stake held by Air Malta, started operations on 10 December 1996. Its prospects are strengthened by its location at Bergamo, near Milan Linate, an airport which is expected to grow in importance when most Linate operations are moved to Milan's other airport, Malpensa, in 1998. Azzura operates a pair of AI® Avro RJ85s on routes from Bergamo to London City, Paris and Rome/Ciampino, and plans to introduce a third aircraft on the Turin route in the second quarter of this year. It has a commercial agreement with Air One covering flights from Rome to London and Paris.
Source: Flight International
