Kevin O'Toole/LONDON

Alitalia plans to start its alliance with KLM from November 1998, shortly after the opening of the Italian carrier's new Milan hub at Malpensa Airport, which is seen by both carriers as a cornerstone of their partnership.

Alitalia's choice of European alliance partner on 17 December confirmed, as widely anticipated, that KLM had beaten its French and Swiss rivals.

Full operational details of the alliance have still to be worked out, but the carriers confirm that the aim is to develop a multi-hub strategy around Amsterdam Schiphol, Rome Fiumicino and the new Malpensa, which is due to take on most Milan flights from October.

"Malpensa is a major aspect of the alliance," says KLM, adding that it will support development of the hub with flights and expertise, but not direct cash investment. Cargo operations are a clear target, with Alitalia hoping to claw back some of the 70% of Italian freight which leaves the country to fly via other cargo hubs.

Within Italy, the alliance with privately controlled KLMis seen as a positive step in Alitalia's drive to become more commercial and reduce state interference. The announcement was accompanied by suggestions from Italy's transport minister that 1998 could see Alitalia's privatisation.

The alliance also helps KLM to achieve its goal of building its relatively weak share of the European market to the 10-15% level. On present standings, the two airlines - together with KLM's existing partners Air UK, Braathensand Eurowings - should be on course to hit the higher end of the target. Together, these will have sales of around $12.4 billion and carry about 40 million passengers across their combined networks, putting them in reach of the British Airways and Lufthansa/ SAS groupings.

KLM also brings a transatlantic partner in the shape of Northwest Airlines. Northwest, however, has no Italian flights, while Alitalia is already linked with Continental Airlines on flights between Rome and New York, a service which both airlines have said they hope will survive.

Source: Flight International