Andy Nativi/GENOA

The European Commission (EC) is renewing its interest in Italian moves to switch airline operations from Milan Linate Airport to the expanded airport at Malpensa, just as user airlines, led by Lufthansa, prepare to raise new objections to the plans.

The airlines, which include British Airways and Air France, claim they are being told to move their Milan operations to Malpensa in time for the winter schedule that starts in October, although they say an earlier dispute over timing of the move was resolved by an agreement allowing them to keep some operations at Linate until next year's summer schedules.

The continuing disagreement over Malpensa and the activities of Italian flag carrier Alitalia has again drawn the attention of the EC. Transport Commissioner Neil Kinnock wants answers from Rome on several issues, including the timing for completion of the network of highway links to the new hub airport and the protests from several European airlines about the decision to concentrate their flights in the "old" Malpensa terminal 2, leaving Alitalia and its ally KLM in the new terminal 1 - also home to all intercontinental flights as well as some smaller Italian airlines. The European airlines have taken issue with slot allocation, claiming it is "unfair" and favours Alitalia. The complaints are denied by the Italian authorities.

The EC has also had protests from rival airlines that Alitalia has become the "price leader" on several routes in contravention of the Commission stipulation that it is forbidden to do so until the end of next year as part of a wider agreement on the provision of state aid for Alitalia.

There are also concerns that the Italian airline's performance may be falling behind target. Loss figures of L150 billion ($80 million) are being mentioned for this year and will probably only be offset by cash from the sales of stakes held in SITA subsidiary Equant and the Galileo central reservation system.

The situation has deteriorated to the point where talk over a possible quick sale of the state holding in Alitalia has almost been abandoned. In the current environment, state holding company IRI is unlikely to launch the privatisation until at least early next year. Even that will require a prompt recovery in fortunes.

Whatever happens, the share sale cannot be delayed too long, as the alliance with KLM is based on the premise that Alitalia will be privatised. A hefty compensation fee will be required if the deal is not done by the middle of next year.

Source: Flight International