The complaint by nine major operators at Milan/Linate airport to the European Commission about next year's transfer to the new Malpensa airport reflects their concern over the threat that Malpensa poses to their own hubs.
While Alitalia could not develop Malpensa into a hub alone, the Italian flag carrier is deep in discussions with potential partners Air France, Swissair and KLM. Meanwhile, Alitalia will still be able to feed Rome from Milan's downtown Linate airport, and this is the focus of the complaint.
The nine carriers, which ironically include two potential partners, Air France and KLM, as well as British Airways, Lufthansa, Sabena, SAS, Iberia, TAP and Olympic, claim that the rule under which all routes except Milan-Rome will have to transfer to Malpensa by October 1998 is unfair. 'Only one airline, Alitalia, will be able to feed its hub from Linate,' says Chris Allen, head of competition and industry affairs at BA.
Malpensa is 48km from Milan, and while a spur road to the autostrade should be ready when the airport's new terminal opens, the rail link to Milan will not open until 1999. So passengers will prefer to fly out of Linate to Rome and take a connecting flight there, rather than endure a long ground journey to Malpensa in order to fly to another European hub, says Allen.
Airport operating authority, SEA, which operates both Milan airports, says the ruling satisfies the Commission's transparency requirement because it states that routes with more than 2 million passengers a year can remain at Linate, only 7km from the city centre. The international carriers retort that Milan's number two route, to London, only accounted for 1.1 million passengers in 1996, so the 2 million rule is a thinly disguised attempt to boost Alitalia.
The current traffic split at Milan, under which European flights use Linate while long-haul services use Malpensa, means that Milan attracts little connecting traffic, and restricts the number of economically viable services.
Although Milan has the third largest urban population in Europe, its airports rank seventh with 16.4 million passengers between them, according to Airports Council International. SEA estimates that 2 million passengers a year are 'lost' to other European hubs, including 1 million travelling to Europe, and 300,000 to North America. Lack of feed opportunity is the main reason why only Alitalia, Continental, United, TWA, Delta, Japan Airlines, All Nippon Airways and Varig operate long-haul flights from Milan. As a result, the city claims its intercontinental accessibility ranks at only 13 on a scale where Frankfurt scores 100 and Amsterdam 80.
Malpensa is intended to change all that. With a capacity of 18 million passengers a year when it opens, rising to 24 million in 2000, SEA hopes that as much as 40 per cent of Malpensa's passengers will be making connections.
The Malpensa 2000 project is costing L1,990 billion ($1.2 billion), and is supported by a $237 million loan from the European Investment Bank. Opening had been scheduled for 1 January 1998, but this has slipped by 10 months.
By the time Malpensa opens, Alitalia should have its partnership strategy firmly in place. 'An alliance decision will be made by the end of the year. We are currently talking to KLM, Swissair and Air France. No equity swap will be involved,' says a spokesman.
While Alitalia to is expected to join up with KLM or Air France, a leaked internal analysis shows Alitalia management currently favours Swissair. The report refers to Swissair as having 'the best fit with Alitalia's network and market penetration', a source reveals.
Alitalia is still attracted, however, by KLM's 'good intercontinental routes', says Francesco Staccioli of main cabin union, Sulta. Staccioli points out that Alitalia's good middle-range fleet would work well alongside KLM's long-range aircraft and intercontinental route network. A KLM spokesperson confirms that Alitalia is the only European airline with which it is currently discussing an alliance.
However KLM's aggressive approach may scare off Alitalia's unions and Italy's left-wing government may opt instead for an alliance with Air France, says one source. 'Air France is the most similar to Alitalia. They both have strong links with the state and Air France would provide the easiest partnership solution for Alitalia in terms of politics and unions,' he says.
Alitalia and Air France have already taken tentative steps towards an alliance, after the pair started codesharing in April 1997 on flights between Italy and France.
R Whitaker/L Jones
Source: Airline Business
