Alitalia’s rivals ready to pounce at Rome; easyJet and Air One already exploiting opportunities at Malpensa

Image: The Alitalia Vultures
All routes lead to Rome: As Alitalia continues its drawn out last stand, Lufthansa considers whether takeover may be a better method of snapping up its Fiumicino services rather than sharing the spoils competitively as it has at Malpensa.

With the demise of Italy’s troubled flag-carrier apparently closer than ever, this week examines what the response has been to Alitalia’s major downsizing at Milan Malpensa, which are Alitalia’s biggest domestic routes from Rome Fiumicino and which foreign airlines would benefit most from its possible disappearance.

Alitalia’s traffic performance in recent months has been tracked in our trendwatch  which clearly shows that the carrier’s load factor has fallen well below those of its major rivals and that passenger numbers have declined over 20% on a year-over-year basis.

easyJet and Air One taking up slack at Milan Malpensa

Since Alitalia axed over 70% of its flights at Malpensa at the start of the summer season other carriers have been expanding their operations and networks at the airport. easyJet has doubled its flights from the airport in the last 18 months while Air One, which did not operate from the airport at all in summer 2007, now flies to 10 destinations in five countries.

Chart: Changes at Milan Malpensa
Source: OAG Max Online

easyJet already operates 24 routes from the airport and before the end of this year will be adding six more to Brindisi, Copenhagen, Lamezia Terme, Rome Fiumicino, Sofia and Stockholm Arlanda. Air Berlin moved its Berlin and Dűsseldorf services from Milan Bergamo to Malpensa in mid-June, while Sterling and Aer Lingus will begin new services to Stockholm and Belfast respectively before the end of the year. Lufthansa meanwhile has announced plans to base several A319s at the airport from next February. These will be operated by Air Dolomiti to Barcelona, Brussels, Bucharest, Budapest, Lisbon, London, Madrid and Paris.

Last April, Malpensa’s weekly departing seat capacity was 282,256 seats. This April it had fallen to 221,903 but has already climbed up to 238,873. In that period Alitalia has removed 111,000 weekly one-way seats but the airport has only lost 43,000 weekly seats, demonstrating how other carriers have quickly made up the lost capacity on many routes.

Alitalia far from dominant in domestic market

Alitalia still has one-third of the Italian domestic market which is quite low when compared with some other flag carriers in Europe. Lufthansa has over 55% of the German domestic market and Air France over 90% of the French domestic market. Air One and Meridiana combined are already bigger than Alitalia on Italian domestic routes, while Windjet (8.1%), Ryanair (4.4%), easyJet (3.4%) and (2.5%) all have significant market shares. Alitalia operates just 35 domestic routes compared with 46 which are flown by Air One and 30 by Meridiana.

Chart: Alitalia’s top 12 domestic routes
Source: OAG Max Online for w/c 22 Sep 08

Alitalia’s top 12 routes are all from Rome’s main airport where it has a 53% share of domestic flights and capacity. On these routes Alitalia faces head-to-head competition from at least one other airline on 10 of them, with only Naples and Bologna currently monopoly routes.

Lufthansa is biggest rival at FCO on international routes

Having decided to focus operations at Rome’s Fiumicino (FCO) airport this summer, Alitalia currently has 33% of scheduled seat capacity on international routes at the airport, flying non-stop to 53 destinations. However, 106 other airlines also offer international flights to the airport. Of Alitalia’s 53 international routes from FCO it has a monopoly on just nine, mostly long-haul, routes – Beirut, Boston, Caracas, Lagos, Los Angeles, Miami, Sao Paulo, Thessaloniki and Tokyo.

The following chart shows which carriers have the most seats competing with Alitalia on routes out of FCO and would therefore benefit most from Alitalia’s demise.

Chart: Leading airlines competing with AZ at FCO
Source: OAG Max Online for w/c 22 Sep 08

Lufthansa competes on just two routes to its two main hubs at Frankfurt and Munich, while Vueling competes on four routes. With Iberia’s involvement in clickair, and its planned merger with Vueling, it stands to gain even more from Alitalia’s collapse.


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