What next for Italian airlines?

After attempts to consolidate the local airline sector last year, Italian airlines are back in the news this year. Much of the attention has been dominated by Alitalia, and the expiration earlier this month of a lock-in on the airline’s Italian investors (a total of 21 different Italian interests took a stake in the airline as part of the rescue deal which relaunched it as a private carrier four years ago) and who might be a buyer if they do decide to sell. For much more on this see our recent analysis of Alitalia and the Italian market.

At the same time the pressure on Italy’s second biggest carrier Meridiana Fly continues. It announced plans to cut 10 aircraft and 600 jobs at the end of last year as part of efforts to stabilise its financial position, and has just appointed Roberto Scaramella as its new chief executive. It comes as parent company Meridiana has consolidated its ownership of the carrier following its takeover of Air Italy last year. Italian aviation regulator ENAC has now put Meridiana Fly under closer scrutiny by issuing it with a temporary operating licence, renewable on a monthly basis. 

Similar conditions have been in place at another Italian airline Blue Panorama since October – which had originally been in line to merge with Alitalia last year. Another Italian carrier, Wind Jet, ceased operations last year shortly after failing to agree terms on a deal with Alitalia.

All this has prompted ENAC to launch a probe into the financial health of Italian airlines (more on this today on Flightglobal’s premium news service) and you can read Flightglobal’s analysis from last November for more about the challenges facing Italian airlines

The combination of mergers and failures among Italy’s airlines in recent years has seen a sharp decline in the number of local carriers, reducing their collective market share in the process and opening the door further to overseas carriers. Low-cost carriers in particular have been staking their claim in the highly fragmented Italian market. Market share based on ASK data shows Ryanair is now comfortably the second largest operator on Italian domestic routes, and along with EasyJet also have a strong presence on flights from Western Europe into Italy. Following the collapse of Wind Jet, Meridiana Fly is now the only other local airline alongside Alitalia and its Air One brand to register a significant presence in domestic or intra-European share. Read more on this market share shift here.

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