Marco Messalla/MILAN

Swissair parent SAir Group is to grow its increasing portfolio of small European airlines by taking the maximum permitted stake in Italian long-range charter carrier Air Europe, through the purchase of 49.9% of Dutch-based holding company Tegel.

The move follows the recent purchase of 44%of France's Air Littoral, and is in addition to its existing 34% share of small Italian charter carrier Volare Airlines.

Air Europe is Italy's leading charter airline, with seven Boeing 767-300ERs and a pair of leased 777s on order. Based at Milan Malpensa Airport, the carrier plans to open a scheduled domestic network in the second quarter of next year, using a fleet of Airbus A320s or Boeing 737s leased from GATX/SAir's joint venture leasing company, GATX Flightlease.

Connections will be provided between Malpensa and six destinations in the south of the country, competing directly with Alitalia and Air One, the latter having recently transferred all of its domestic flights (except Milan-Rome) to another Milan airport, at Bergamo-Orio al Serio.

Air Europe, which reported a turnover for 1997 of L418 billion ($258.5 million), and an operating profit of L29 billion, plans international services from Rome-Fumicino following its application for route concessions to the USA, which will come into effect after the forthcoming signature of the US-Italian open skies deal.

The SAir Group has also been talking to Air One about a potential purchase of the independent carrier, but has yet to reach agreement. The Air Europe deal continues SAir's moves into a European market in which it is not allowed to take any majority holdings because it is not a European Union member.

Source: Flight International