We know that Alitalia has been struggling to survive basically each day of operations for years now, and that several privatization attempts by the Italian government have failed, as most contenders have backed out of the deal, as soon as they learned about the real numbers, and the real situation at the Italian Flag-carrier. Not so long ago, after the last failed privatization tender, the Italian government named a new CEO and management, which after a few weeks have come up with a survival and restructuring plan.
It was announced on 05SEP2007, that Alitalia plans to scrap around 150-170 flights of its 340 daily flight from Milan Malpensa airport (MPX), as part of the new business plan to stop (or reduce) the financial difficulties. The airline confirmed around the beginning of September, that is “no longer able to operate efficiently out of two hubs” due to mostly economic reasons. At that time there were no details of the plan available, but the Italian carrier said that its new strategy includes the increase of activities at Rome Fiumicino while repositioning Milan Malpensa flights by focusing on specific business demands. It would also mean consolidation of its cargo and crew bases as well as of maintenance activites at the main airport of the North-Italian city of Milan.
Milan is the business and industrial center of Northern-Italy and a relatively rich region just South of the Alps, and one of the richest areas in Italy. If Alitalia had flown a daily 340 flights from the airport until now, and just all of a sudden cuts half of those, it would mean a huge loss in air travel services for the region. But under the European Union Open-Skies agreement, we could be certain immediately after the plan was revealed that another European airline would move into the vacuum of 170 missing daily flights, if (or as soon as) it had the chance. The real question was only the identity of the airline(s) that would take over most of the market left behind by Alitalia.
On 13SEP2007 (so only 8 days after the Alitalia announcement!!) Dublin-based Irish RyanAir has told the press on a news conference, that they are ready to launch 80 new routes from two Milan airports stepping in to the place left by Alitalia. Europe’s biggest low-cost carrier is prepared to use an additional 12 airliners at Milan’s Malpensa airport (worth an $840 million investment by 2012) and another six at Serio airport in Bergamo (which means an investment of $420 million by 2012 next to the already based 4 aircraft), according to company spokesman Peter Sherrard. The planes are worth more than USD$1 billion at list prices and are part of a hefty backlog of 171 (!) planes Ryanair has on order with Boeing. At Malpensa, Ryanair would launch 50 European flights and 10 to domestic Italian destinations, he said. It is not yet known (or announced) whether if RyanAir will buy slots (slot = the right to land (and take-off) at a particular airport at a given time-frame) from Alitalia or directly from the concerned airports.
If we look at the numbers, there are 170 flights being cut back by Alitalia, and 80 of those already have an alternative offered by RyanAir. If we expect that about 20 percent of the AZ flights to be cut were losing money big time and were not sustainable under any circumstances, there are still about 60 flights up for grabs!! Who will be the next one to move into Milan-Malpensa and service the Italian passengers out of that region? Probably Air One, the second biggest Italian airline will take over some routes and will gain a bigger market share, and I can also foresee that Lufthansa/Swiss may use the vicinity of their hubs (Munich and Zürich) to grab some of the passengers on their connecting flights. And then of course other low-costs could also be targeting the unserved demand, but that is highly risky to tip any of those as a second player after RyanAir.