Checking in on Alitalia, Because It’s Been Too Long

Jul 16, 2010

More Reading on This Topic: Alitalia, Worst Airline Ever

I never thought things could get any worse for Alitalia, but they have. No, no. It’s not that they’re performing worse. It’s that they’re no longer feeding me with excellent fodder to support my claim that they’re the worst airline ever. It’s really a drag. But fear not, there are still some gems out there that make me reluctant to remove that title just yet.

Alitalia has, without question, been performing better, but that’s a relative term. In the first quarter of 2010, the airline lost a mere €125 million. I know, still awful, right? But that’s better than the €210 million loss in Q1 2009. Most of that is probably coming from filling an terrible 64.5% of seats as opposed to last year’s frighteningly terrible 52%.

The airline has also just joined the Air France/Delta joint venture. I joked with someone that it must have made Air France and Delta an offer they “couldn’t refuse.” Last time Delta CEO Richard Anderson flew on a flat bed on Delta, he probably woke up with a horse’s head awaiting him.

Why exactly am I writing about them if the news isn’t that bad? Well, I saw this interview with the awesomely-named Antongiulio Zecchini, Alitalia’s network planning manager. Maybe it’s a language barrier, but I found it to be quite confusing. When asked to explain the dual airline Alitalia/Air One strategy, Antongiulio said this:

Alitalia is now hubbing at Rome Fiumicino and optimising Milan operations to serve the main local markets. It also serves premium flows in Linate, taking care of the time-sensitive flyers from/to (Milan) Linate city airport and long-haul operations.

While Air One is the ‘smart carrier’ dedicated to short and medium-haul price-sensitive travellers from/to Milan Malpensa and competes with low-fare carriers.

Alitalia’s integration with Air One also brought a legacy of bases in the Italian province. As well as feeding the long-haul network, priority has extended to covering routes bypassing Rome and Milan, to better serve customers along the Italian peninsula.

Ok, so lemme get this straight. We know that Rome/Fiumicino is a hub. Milan Linate is just for the “premium flows” – heavy shorter haul biz traffic markets, I assume. Malpensa is served by Alitalia on the best routes while Air One serves the rest of Malpensa by going up against the low cost carriers. It’s also looking to beef up the domestic markets that don’t touch Rome and Milan. So it’s a huge mix of point-to-point and hubbing.

I think I get it, but then he goes and contradicts himself by saying that Alitalia codeshares with Air One to feed intercontinental operations at Malpensa. That sounds like a hub. But if it is a hub, it’s not doing a very good job, because Alitalia keeps moving other short haul services to Linate. This dual airport thing in Milan is just killing that city. If that’s not enough, there’s Milan Orio Al Serio as well, and Air Italy is serving that. Yep, Alitalia is codesharing with that airline now as well.

I mean, Milan isn’t even a huge focus for the airline. That’s supposed to be Rome. Meanwhile there are all kinds of efforts to grow the airline outside of Rome and Milan altogether in other Italian cities as well.

And we haven’t even talked about the fleet yet. For shorter haul, the airline is finally getting close to ditching its last MD-80. But there is still a split fleet between the A320 family and 737s. Let’s not forget it also flies Embraer 170s and CRJ-900s. Nice of them to sample each manufacturer. (Yes, it’s even believed that there will be an order coming soon for the Sukhoi SuperJet.)

On long haul, there’s a motley mix of ten 777s, six 767s, and two A330s. The A330s are being used from Malpensa while the rest of the fleet seems to be in Rome.

Got that? I swear, this airline is in a strange place. On the one hand, it needs to do a lot of work to get in better shape. On the other hand, it seems to be trying to do too much at once. I have no idea how to fix that, but hopefully that means it will provide me with good fodder for years to come.

Brett

13 responses to “Checking in on Alitalia, Because It’s Been Too Long”

kt74

Jul 16, 2010 at 5:18 am

Oooooh, harsh! C’mon, there is *some* sense in the route strategy, and it is a vast improvement on the “everywhere is a hub” theory of the past

Rightly or wrongly, Alitalia has decided that Rome is the political and strategic hub, and everywhere else is about point-to-point. We (the fare paying business traveller) generally need to get to Milan, not Rome, and would love all flights to be concentrated at close-in Linate. Unfortunately, that airport is the size of postage stamp, hemmed in by houses and prone to fog. Alitalia does, however, have a lot of slots there, and therefore I often have no choice but fly Alitalia when I need to get to meeting in the city – it has a much better schedule to/from London than BA, and always has last minute seat availability! Meanwhile long haul and secondary destinations are left with no choice but to schlep out to Malpensa – think of it like IAD vs DCA

As for Orio Al Serio, you could only define that as being “Milan” if you were Ryanair or maybe Southwest (think of it like BWI); it does however serve other industrial cities in the Northern industrial belt, and is much more convenient for point-to-point business trips into the Lombardy hinterland

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Marco Barisione

Jul 16, 2010 at 6:09 am

You don’t understand Italy. Rationalising the airports would be hugely controversial. The Rome/Milan split is due to Rome being the political capital, while Milan the economic one; nobody wants to give up on their major airport in favour of the other city.
Italy is also the country where Alitalia has to add a new flight between Rome and a minister‘s home town every time he becomes minister. Of course the almost always empty flight was cancelled immediately after he resigned due to some scandals (and it happened twice!) .

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David SFeastbay

Jul 16, 2010 at 8:07 am

Italy is a north/south country so there is not reason Milan and Rome can’t both be hubs. They just need to work it out better it seems. With AZ getting more buddy buddy with AF/KL that could also see more route changes from Milan to branch out south timed to AF/KL flights.

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1. CF
  
  Jul 17, 2010 at 9:08 am
  
  The problem is by splitting Milan traffic at Linate and Malpensa, Alitalia really won’t be able to have a true Milan hub. It’s like Delta’s goofy LaGuardia/JFK strategy (that’s sort of dead since the slot swap died), although there are a lot of things you can do in NYC that don’t work elsewhere because of sheer size and traffic.
  
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  1. Scott
    
    Jul 17, 2010 at 9:55 am
    
    I think you’re applying way too much business sense here. Remember, it’s Italy. We’re talking about an airline that was until very recently state-owned and even now remains intertwined with the Italian identity. Politics rarely informs good business decisions… but given the culture CAI is up against I’m trying to reshape a cultural icon into a profitable business, I’d say they are making progress. Will it be enough to save them long-term? Who knows… but I do know that the market forces at work here in the USA don’t always apply in Italy (i.e., the conventional tendency of Italians to fly AZ despite not being the best airline in a given market… just as an example of counterintuitive market forces at play.)
    
    I could only imagine seeing your face inside an AZ board meeting… :)
    
    As for the Milan situation, while I agree with you, see my earlier comment… it could very well be that AZ really WANTS to (and may be) focused on FCO and LIN but has to tout its commitment to Milan overall for political reasons.
    
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Gary

Jul 16, 2010 at 8:40 am

I dunno, I’d have probably gone with Milan as the hub rather than Rome, but I don’t think they can really support both.

If you take as a given that they hub in Rome, the two airpor tstrategy does — or at least could — make sense. Run a Rome shuttle and premium European business markets (London, Frankfurt, Zurich, etc) out of Linate. And run your leisure routes out of Malpensa, if you need to have a separate airline brand like AirOne call Melapensa the low cost carrier operation with the second airline brand.

That probably means shrinking but if you’re hitting 62% loads in THIS environment you probably need to shrink anyway. And geez I know it’s expensive to fire people there, but shrinking is probably the only way to accomplish a workforce downsize anyway.

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Bill from DC

Jul 16, 2010 at 10:42 am

load factors of 52% and 64.5%? who are they, independence air?!?!?!?!

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Scott

Jul 16, 2010 at 10:57 am

Thumbs up! I was starting to miss the usual Alitalia segments. :)

Just an aside, Richard Anderson always makes a point to fly coach. (He’s a stronger man than I!!) Not much room for a horse head in seat 32E… ;-)

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Scott

Jul 16, 2010 at 11:13 am

The fleet mix isn’t all that odd. As we all know, it’s the result of a merger. When you compare them to most recently-merged carriers, (Delta, for example) their fleet is actually pretty streamlined. Plus, they are making strides toward harmonization (as you noted), albeit they have a long way to go, but considering their cash situation I wouldn’t expect much more from them yet.

As for the Milan situation, Italy is hyper-political and Burlusconi is Milanese. I’m making an educated guess that Alitalia, from a business side, would love to focus on high yield Linate and the O&D long-haul market from Malpensa (and in practice may be doing just that), but publically they have to stress Milan’s importance for political favor.

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1. CF
  
  Jul 17, 2010 at 9:12 am
  
  There’s a huge difference between Delta/Northwest and Alitalia/Air One. While Delta does have an insanely large number of aircraft in the fleet, they are all relatively large fleets. Alitalia has two A330s and something like 10 737s. As has been said, if they’re running a 60% load, they could use some shrinking. These tiny fleets are not helping.
  
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Zach

Jul 19, 2010 at 11:47 am

Interesting and entertaining, as always. Regarldess of their business practices, their product appears decent: http://www.flyertalk.com/forum/trip-reports/1105926-mxp-mxp-new-az-a330-200-50-pics.html

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Krista

Jul 25, 2010 at 9:32 am

At the risk of repeating some of the previous comments, here’s all I can say.
Business in Italy gets done in Milan. Some tourists go to Milan, but not many in comparison to, say, Rome. I don’t know the difference in size between the business traveler market and the tourist market, but I would argue that Italy is in a somewhat unique situation in that way. (The UK, for example, doesn’t have two such cities. You fly into London. That’s it.)

Regarding Linate vs. Malpensa…If you fly into Malpensa, you have to take a 45+ minute train into central Milan. And that doesn’t even mean you’re close to where you need to go. Then you need to take the metro or a taxi. Alternatively, you can take the bus to central station. I have taken the bus to/from Malpensa because my company’s Milan office is close to Central Station, but I’m often one of the few business travelers.

Linate, on the other hand, is an easy 20 minute taxi ride from the Central Station area. With no traffic, you are there in a jiffy. (And in and out of the airpin a jiffy.) I’d compare it to flying into City Airport in London. When given the choice, I go City. It’s all business travelers and everyone is fairly efficient about things.

I’m still not sure I understand what that Alitalia dude is saying, but just thought I’d add my two cents. I’d also note that Alitalia has been serving some of the lamest airplane food ever. Like two slices of bread with one slice of meat sorts of things. I should really take photos.

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Lisa

Jul 26, 2012 at 7:24 am

Three words: Worst. Airline. Ever. They lost my baggage, which was never found while I was away. So, no luggage on my trip. Another airline found the bag and called saying that it is in Rome. Trying to get in touch with someone at ?customer service? has resulted in NOTHING. Both emailing and calling, no response! Trip over, stewardesses were rude and impatient. Seats uncomfortable. Whole experience was terrible. Three weeks later, still NO BAG and still NO RESPONSE. Do yourself a favor and fly someone else. Hopefully you haven?t already bought your ticket. This is a TERRIBLE company. Subsequently, have heard from lots of other people who had bad experiences with Alitalia. Why are they still in business?? Because they?re cheap. As always, ?you get what you pay for.? I fly internationally fairly often ? I will never take this airline again.

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