ALITALIA likely to resume Australian services

ALITALIA likely to resume Australian services

ALITALIA (AZ)  is tipped to return to Australian skies from late 2015. Etihad Airways (EY), which holds a 49% stake in the Italy’s national airline, will like use ALITALIA as the platform with to expand services to Australia in order to overcome capacity limitations under present bi-laterals. AZ last regularly served Australia until 1998 – that year it moved to a joint venture agreement with KLM Royal Dutch Airlines. AZ  “wet-leased” KLM’s 747s and operated Malpensa-Singapore-Sydney services. When the relationship was unilaterally terminated in early 2000, AZ briefly resumed services to Sydney from March 2000 until October 2000 to take advantage of the traffic it had for the Sydney 2000 Summer Games. In 2008 the “new” ALITALIA was born when it merged with Air One. Since then it has struggled financially. Etihad may represent its “White Knight” for its survival.

Proposed schedule

A  Rome based AZ executive has exclusively revealed to Airline Hub Buzz “We are currently looking at returning to either Melbourne or Sydney from either Rome or Milan. Flights will be co-ordinated conjunction with Etihad and will be designed to offer maximum connectivity with Rome, EY’s European stations and as well our new Milan and Venice services via Abu Dhabi. Plans are in the early stages and more information will be made available once we have finalised a schedule for Australia. Co-operation of some kind with Virgin Australia is also being looked at.”

The source further informed the aircraft type would most likely be a 777-200ER sourced from AZ’s fleet or possibly a  lease arrangement with an EY 777-300ER with the aircraft in AZ colours.

Viability of ALITALIA services to Australia – will they work?
In isolation, AZ flights to Australia would be hard to justify. The costs associated to operate such a long haul service may outweigh any potential earnings. Given that there are presently no Continental European carriers serving Australia, it obvious such carriers have deployed their aircraft to markets return better yields and lower operating costs. Carriers such as Austrian, Lufthansa, Air France and KLM do quite well as “off-line” carriers to Australia using partners to code-share to Australia.

The only European carrier left serving Australia in its own right is British Airways. Virgin Atlantic suspended services to Sydney earlier in 2014. The last Continental European carrier to serve Australia was Austrian Airlines (previously Lauda). It terminated services to Sydney and Melbourne in March 2007 along with its transit points of Singapore and Kuala Lumpur. With strong competition from Asian carrier and even more so from Middle East giants like Etihad and Emirates, European carriers cannot make it financially and economically viable to operate their own services to Australia.

In terms of AZ, with a strong equity partner like EY, Australia just may well work for them this time around. Both carriers will benefit from feed onto their own services from the Abu Dhabi hub. EY has some significant growth planned for AZ in terms of long haul services. This includes expansion of the wide-body fleet and the addition of Intercontinental cities to the AZ network. Cities under consideration are San Francisco, Seoul Incheon, Singapore, Santiago de Chile and Johannesburg. AZ may just have found the right mix in order to “make it”.


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