FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
1986
1986 - 0972.PDF
The Italian factor Alitalia has come a long way since its multi-million lira losses of the 1970s. How will it perform in a more liberal environment? Julia Hayley reports from Rome. A litalia's biggest problem is its nation- t-\ ality. The foreigner's conception of "• Italy as a country plagued by strikes and with a casual attitude to time does nothing to enhance the image of its national airline. It is a sound company in other respects. With five years of profit under its belt, a modern fleet, a captive home market, a debt:equity ratio of almost 1:1, and the Government behind it, Alitalia looks a strong contender in the international market. But is its business so geared to Italian passengers on both sides of the Atlantic that its viability in a less protec ted environment is threatened? At present Alitalia has almost 50 per cent of the traffic to and from Italy and a near monopoly on domestic routes. Italy, long one of the staunchest supporters of regulation, has been gradually relaxing its rules and making bilateral agreements allowing other carriers into its territory. BCal recently won access to fly London- Milan after years of discussions. British Airways serves Manchester-Milan-Rome, although it is not allowed to pick up passengers for Rome in Milan or vice versa, thus protecting Alitalia's densest route. And Cathay Pacific can now fly between Italy and Hong Kong. "Cathay Pacific will be a big problem for us," says Ferruccio Pavolini, general manager of programmes, operations and maintenance. "It will deeply hurt our own Hong Kong routes and, because of its connecting services, our direct routes to Australia and Japan". "US-style deregulation will never happen in Europe," he says, "but we'll have a gradual relaxation of controls, including the 50/50 capacity limits as is the case with BCal." To keep its passengers loyal Alitalia will have to offer standards of service and frequency to compete with some of the world's largest airlines. It has an extensive fleet update programme under way. Last year saw the last of its DC-lOs, 727s and Fokker F.27s phased out. Delivery of the first batch of 30 MD-80s will be complete by the end of this year. Ten more are on order, to bring Alitalia's fleet to 40, the largest outside the USA. Domestic subsidiary ATI has ten ATR42s on order, two of which will be in service later this year. Both Alitalia and ATI will need to replace their 43 DC-9s at the rate of seven or eight a year from 1989/90. "We're look ing mainly at the propfan," says Pavolini, "but if it isn't available by 1991/92, we'll need an intermediate aircraft." The A320 would then be a strong favourite, but Alitalia might opt for a 737 or a MD-80 with V.2500 or CFM56-5 engines. For its intercontinental network the choice of aircraft is more difficult. "We want a 250-seat long-range aircraft, possi bly a twin," says Pavolini. The 767-300ER would be one possibility, he says, but Alitalia is also "looking closely" at the A330 and A340. "We have no technical or operational objection to using twins over the Atlantic, but there has to be market acceptance of the idea," he says. "The risk is that, in a few years' time, there'll be 747s, A340s, and MD-lls over the Atlantic. Then how will the market accept twins?" A twin would be the ideal answer for Italy's Atlantic routes, he says. "We have a lot of North American markets which we cannot serve daily, but could with a smaller aircraft". Alitalia will not buy a twinjet if it is limited to overland routes. Above all, the fleet must be flexible, because the Italian market is so seasonal. In August traffic out of Milan—predominantly business— is virtually non-existent, while tourist passengers through Rome slow down in winter. The carrier copes with fluctua tions on long-haul routes by switching its six all-passenger 747s and its five 747 Combis. On short- or medium-haul routes it can interchange A300s and MD-80s. Most of the MD-80s have 32in pitch seats throughout, so that the business/economy allocation is flexible. Alitalia's expansion this year will concentrate on intercontinental routes. It has already started flying to China under dual designation with CAAC, and is hoping to win a southern USA route, Rome-Milan-Miami-Atlanta. "If we get the rights we'll take up the option for another 747 for 1987," Pavolini says. The •pi • "!?fe "$i&tz ""f^"" • ,.s;..---,.;,. T^s «#^K W*l»!t***f lfpg%* fill*!! ' />*# Tokyo non-stop plans have been shelved after Italy failed to agree overflying terms with the USSR. "In Europe," Pavolini says, "we'll develop mainly existing routes." Alitalia hopes that Italy's recent implementation of the European Commission's 1983 Directive on regional air services will encourage independent regionals to develop. If they do not "Alitalia will pick up all the inter-regional European traffic with ATR42s," says Pavolini. The North Atlantic is still the main stay of Alitalia's business. Half of its total cargo sales and 50 per cent of its intercontinental traffic is on transatlantic routes. It is increasing capacity by 10 per cent in 1986, in line with other major carriers. With many US tourists staying at home for fear of being terrorist targets, bookings are well down and competition for passengers this summer is fierce. "Up to March we have done quite well," FLIGHT INTERNATIONAL, 26 April 1986
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
