Despite Liquidation Air Italy Files For US Flight Permission

Despite entering liquidation earlier this year, Air Italy has applied to the United States Department of Transportation (DoT) for permission to continue to fly between Europe and the US. Air Italy entered voluntary liquidation in February of this year and has just five operating 737 aircraft. The airline has previously had disputes with the US government over the Open Skies agreement. Before insolvency, the airline did have plans to launch new routes to the US.

Air Italy
Air Italy has wanted to launch more routes to North America, and it won’t let liquidation stop it. Photo: Air Italy

Flying with no planes

While most airlines are concerned about the short-term future of the aviation industry, Air Italy appears to be the most hopeful of all. Despite entering liquidation and not having many certified planes to fly, the airline has still applied for flights to the US.

According to Aerotime, Air Italy has claimed that it would be in the public interest to allow it the continued rights to fly. According to US law, the airline does have the grounds to be exempt from 49 U.S.C. § 41301, which gives foreign airlines the right to fly to the states, and includes fifth freedom flights. The application comes despite Air Italy’s tense history with the US government and the big American carriers.

It may be a small carrier, but Air Italy has been a point of contention in the US for quite some time. The issue comes from Air Italy’s owners. The airline is 49% owner by Qatar Airways.

Qatar 777
Qatar owns a 49% stake in Air Italy and has been accused of operating fifth freedom flights via the Italian carrier. Photo: Qatar Airways

How is Qatar Airways involved?

Qatar Airways has been very vocal, and generous, in its support of the little Italian carrier. So much so, that the US government and several US airlines have expressed concerns that Qatar Airways was using Air Italy to expand its grip in North America. Qatar Airways denies this.

Due to European Union regulations, Qatar Airways cannot purchase any more than its existing 49% stake. The other stakeholders were just not prepared to let the airline continue operating at a loss. So, the airline folded. But Qatar Airways is still keen to support the airline, and this application for flights to the US could be seen as coming, indirectly, from Qatar Airways.

Air Italy A330
Air Italy suspended operations earlier this year. Hopes were placed on Ryanair to buy the airline, but the Irish carrier has confirmed it has no interest in purchasing the struggling Italian airline. Photo: Air Italy

A future for Air Italy

With Qatar Airways’ backing, Air Italy was actually improving in terms of sales. It racked up €330 million ($358 million) of sales in 2019. However, it was still operating at a loss overall. It seems unlikely that Air Italy will attract a buyer, even with Qatar Airways’ considerable support.

While the attempt to secure flights to America may seem hopeful, in reality, it is likely a sign that plans to liquidate the airline are ongoing. If the airline can theoretically fly to the US, then it would retain its Air Operator’s Certificate (AOC). This would increase the value of the airline’s assets in the case of a sale.

The current environment means it is unlikely other airlines will be looking to take on a struggling carrier, even one with the right to fly to the US. Currently, two appointed commissioners are in the process of liquidating the airline’s assets and paying off debts.

Even with Qatar Airways support, Air Italy just wasn’t able to compete with carriers such as Easyjet and Ryanair. Do you think Qatar Airways is pushing to revive Air Italy for its own gain? Is this truly the end of Air Italy, or do you think the airline has something planned? Let us know what you think in the comments.