Just yesterday, Alitalia, the flag carrier of Italy, announced it would end its partnership with Air France – KLM.
While most may regard this as a rejection by the bigger carriers for not seeing Alitalia as a viable partner, this is one of many steps Alitalia has taken since its partial acquisition by Etihad Airways in the beginning of 2015 to return the carrier to profitability. In addition to not being profitable for the majority of its existence, Alitalia has received numerous charges of its baggage handlers damaging and stealing customers’ items at Rome’s Fiumicino airport. With so much at stake, Etihad was able to swoop in and acquire the struggling airline, but not without the condition of required profitability by 2017.
Since the acquisition, Alitalia has enacted not just cost cutting measures, but a significant branding overhaul. The airline has promised to introduce new routes, new product and service standards, as well as significantly expanded branding throughout its fleet. Route wise, Alitalia plans to expand long-haul service from Rome and Milan, adding not only new routes, but additional flights to current routes such as Abu Dhabi. Possibly most importantly, Alitalia now has the option to acquire new aircraft based on Etihad Airways’ order book, allowing plenty of additional growth when necessary.
“The energies, passion and expertise I have experienced at Alitalia in recent weeks do not leave any doubt that the airline we’re unveiling today will become once again a premium Italian airline recognised worldwide,” Luca di Montezemolo, the CEO of Alitalia at the time of the acquisition, stated. “This is why I believe the people in Alitalia are a pillar of the history we’re about to write.”
Even since the original announcement in January, Alitalia has hired a new CEO, Silvano Cassano as a part of its turnaround efforts. He has already committed to dropping short haul routes in favor of more profitable long haul routes, and is hoping that he can draw premium customers that will pay more for pampered service. This will include Wi-Fi across the entire fleet, better food and new business class seats fitted with leather.
“Alitalia can only thrive as a five-star airline,” Cassano said in an interview at Rome’s Fiumicino airport. “Consumers are saying ‘give us an excuse to come back to you.’ They want the love affair to start again.”
Needless to say, this turnaround effort won’t happen without significant hurdles. Alitalia still faces significant competition from low cost carriers such as Vueling and AirOne, and without the alliance with Air France – KLM it will undoubtedly see competition from Europe to the rest of the world. However, Cassano, along with Etihad’s CEO James Hogan, believes Alitalia can not only survive, but succeed as it moves forward in its quest to restore glory to the Italian carrier.
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