Currently under government restructuring, Italian flag carrier Alitalia could have a new name while remaining a full-service carrier. This is according to Italian media reporting on the situation. Administrators appointed by the Italian government are making some tough decisions as they try to lay down a solid foundation from which to relaunch the struggling Italian airline.
According to media outlet Epoca Negocios, the CEO appointed by the government to head the new airline goes by the name Fabio Lazzerini. Lazzerini participated in a hearing last Thursday at the Chamber of Deputies and is considering changes for the airline.
“We still need to see if the new company will be able to call itself that. We do not take the name for granted. The name is an asset and has great value, especially abroad, but it is not taken for granted,” -Fabio Lazzerini, CEO, Alitalia newco
The airline name may change, but its service level to remain the same
While the new airline’s name may not be Alitalia in the future, one thing that seems to be already decided is its positioning in the market. In fact, Epoca Negocios also notes that Lazzerini has ruled out repositioning the airline to compete in the low-cost sector. Instead, it will maintain its positioning in the premium (full-service) market.
Alitalia has been under government intervention since May 2017. This was due to a liquidity crisis that left it on the verge of bankruptcy. The airline has not been profitable for quite a long time and has often been searching for new investors to turn the carrier around.
A challenging market to compete in
Europe’s single air transportation market – otherwise known as The European Common Aviation Area (ECAA) has intensified competition since the framework was created in the 1990s.
One of the biggest game-changers has been the rise of low-cost carriers flooding the market with cheap seats. easyJet, Ryanair, and Wizz Air are responsible for much of this phenomenon.
Alongside this fast-paced scene is the intense competition between legacy carriers offering full-service, premium flight experiences. This ranges from British Airways on the western edge of Europe to Air France, KLM, Lufthansa, and SWISS on the continent. In addition to the European giants, the Middle Eastern carriers offer stiff competition when it comes to travel between Europe and Asia.
In addition to the great carriers already filling the skies, this new airline is taking form at a time when air travel demand is low, and there is an over-abundance of capacity across the world. It seems like no matter which direction this new Italian carrier goes; it will have the odds stacked against it.
Do you agree with “the new Alitalia’s” decision to stay a full-service carrier? Or should it pivot to the low-cost market? Or do you think something in between, similar to airBaltic, could work? Let us know your thoughts in the comments!
