ANALYSIS: Low-cost carriers continue Italian expansion

London
Source:
This story is sourced from Pro
See more Pro news »

Fresh traffic data released by the Italian civil aviation authority (ENAC) underlines just why EasyJet fought so hard to win the rights to the prized Milan Linate-Rome Fiumicino route.

The UK low-cost carrier launched flights on the key business route - which links the Italian capital with Milan's downtown airport - on 25 March. Initially operating the service twice-daily this will quickly ramp up to five flights a day.

The new route is hugely symbolic for EasyJet - chief executive Carolyn McCall describes the city pairing as one of last great monopolies in Europe - as it not only brings a competitor to Alitalia onto the route, but also underlines the UK low-cost carrier's rise in key business markets.

ENAC figures for 2012 show Linate-Fiumicino is the second busiest domestic route in Italy, behind only Fiumicino-Catania. Nearly 1.4 million passengers were carried on the route in 2012.

2012: Top five Italian domestic routes by passenger number

Airport

Airport

Passengers 2012

Catania Rome Fiumicino      853,000
Rome Fiumicino Catania 848,000
Rome Fiumicino Milan Linate 701,000
Rome Fiumicino Palermo 687,000
Milan Linate Rome Fiumicino 679,000
Source: ENAC

Alitalia formerly operated the key route in competition with Air One, but was temporarily allowed to operate the service as a monopoly under a ruling from Italy's competition agency in late 2009 following the merger of the two carriers. EasyJet beat off competiton from five other bidders to secure the rights to the route when it was opened up to a new competitor in October and Alitalia required to give up seven slots to allow EasyJet to launch its service.

The UK carrier was finally cleared to launch the flight by an Italian appeal court upheld the decision after it was challenged by Alitalia and fellow Italian carrier Meridianafly.

EasyJet expects to carry around 350,000 passengers annually on the route.

It marks one of the most high-profiles advances of foreign low-cost carriers into the highly fragmented market, but is only the latest example of expansion into Italy. EasyJet for example carried 12.5 million passengers in 2012 on Italian routes - up nearly 10% on the previous year - and now bases 24 aircraft in the country. That includes 18 at its base in Milan's other airport, Malpensa, which is EasyJet's second biggest operation behind only London Gatwick.

Ryanair meanwhile now has eight bases in Italy and figures from ENAC of the leading carriers operating in Italy based on passengers numbers in 2012 shows the Irish budget carrier just behind Alitalia (including its Air One and regional operations) in carrying 22.8 million passengers.

2012: Leading airlines operating in Italy by passenger number

Airline

Country

Passengers 2012

Alitalia Group Italy 25.3m
Ryanair Ireland 22.8m
EasyJet UK 11.8m
Lufthansa Germany 5.5m
Meridianafly Group Italy 4.2m
Air France France 3.3m
British Airways UK 2.7m
Wizz Air Hungary 2.4m
Air Berlin Germany 2.1m
Vueling Spain 2.0m
Source: ENAC

That market share for foreign carriers was in part fuelled by the retrenchment which followed Alitalia's restructuring and merger with Air One - the capacity of which was capped at around two-thirds the size as part of European Commission approval - and the inability of Italy's local carriers to fill the void.

That Italy's second largest carrier Meridianafly ranks only fifth and there are no other Italian operators among the top 10 biggest carriers speaks volumes about the fragmented Italian market and difficulties its airlines have faced. Alongside the Alitalia-Air One merger, consolidation over recent years has also seen Air Italy and Eurofly wrapped into Meridianafly, while budget operator Wind Jet collapsed in 2012.

ENAC figures show passenger numbers across Italian airports in 2012 fell 1.4%. Fiumicino led passenger numbers in 2012 with 36.7 million - down nearly 2% -followed by Milan Malpensa where passenger numbers were down 4% at 18.3 million.

Flights from Fiumicino to Paris Charles de Gaulle was the busiest international connection in 2012 with 1.2 millin passengers, while Rome connections to Madrid Barajas and London Heathrow were also over the million passenger mark last year.