Air Italy announced yesterday (09/08/19) the signing of Special Prorate Agreements (SPA) with Finnair and El Al.
The airline, which became Europe’s newest airline in February 2018, announced the partnerships in a press release.
With the agreement of Finnair, five Finnish destinations (Helsinki, Turku, Oulu, Kokkola and Rovaniemi) are now accessible via Malpensa. This applies to passengers wishing to travel from Rome, Naples, Palermo, Catania, Lamezia Terme, Cagliari and Olbia.
“At the same time,” writes the airline, “Finnair’s customers have now the opportunity to fly to Air Italy’s African destinations, traveling from Finland via Malpensa, and connect seamlessly to Dakar, Lagos, Accra, Sharm El-Sheikh and Cairo.”
With the agreement of El Al, Air Italy’s passengers travelling from the United States can now connect with El Al via Malpensa and book onward flights to Tel Aviv. The reciprocal agreement allows El Al’s customers to choose Air Italy as their carrier to North America.
The SPA signings represent a move by Air Italy to try to expand its network without spending excessive capital. The airline already has SPAs with Aegean and Alaskan Airlines, and codeshare agreements with eight other international airlines.
What is an SPA?
A Special Prorate Agreement is a type of interline agreement between two or more airlines. The agreement seeds the way in which fees and revenue shared from ticket costs are distributed.
An interline agreement is a commercial promise between airlines to handle passengers traveling on one itinerary.
A straight-forward interline agreement allows passengers to travel seamlessly to their destination on one ticket. An SPA on the other hand specifies to each airline involved the terms of the agreement. That is to say, the financing, distribution and invoicing of the fees paid by the passenger.
Of an SPA the ticket fees are paid to only one of the carriers involved in the agreement. The interlining carrier then invoices the carrier that issued the ticket. It can then collect its share of the fare.
Generally speaking, any type of interlining agreement allows an airline to send passengers to destinations that it does not serve. And a prorated agreement forms the financial basis of how interlining of passengers takes place.
Air Italy expansion
Air Italy’s SPAs will reap a number of rewards. Most notably, the carrier’s market presence will increase. This is sure to dampen still further the spirits of flag carrier Alitalia and the US airlines bemoaning the carrier’s links with the Gulf.
In addition, the latest round of SPAs is apt to provide the young pretender with a great deal of additive revenue. By hooking up with Finnair and El Al, Air Italy can take passengers from other carriers serving the same destinations and adequately supplement their in-house returns.
For an airline such as Air Italy which is trying to bolster its market share SPAs such as these prove very useful.
In his August newscast, Air Italy Chief Operating Officer, Rossen Dimitrov, said of the agreements: “One of the key aims of Air Italy is expanding our network to offer ever more travel opportunities as well as great connectivity to our customers.
“To date, we have already reached a number of important milestones in this ambition, and today we are very proud to enhance the cooperation with Finnair and El Al in addition to our partners, Qatar Airways, Bulgaria Air, Latam, Aegean Airlines, and Alaska Airlines.
“Moving forwards, we will continue to reinforce our partners’ network with SPA and code-share agreements in order to offer a progressive enlargement of travelling opportunities for our loyal and expanding passenger base.”