Alitalia To Remain A Full Service Carrier

Currently under government restructuring, Italian flag carrier Alitalia could be given a new name while remaining a full-service airline. Administrators appointed by the national government are making some tough decisions as they try to lay down a solid foundation from which to relaunch the struggling airline.

The Airbus A320 of the Italian flag carrier
Alitalia is on the edge of being nationalized and becoming a government-owned entity. Photo: Getty Images

According to media outlet Epoca Negocios, the CEO appointed by the government to head the new airline goes by the name Fabio Lazzerini. Lazzerini participated in a hearing last Thursday at the Chamber of Deputies and is considering changes for the airline.

“We still need to see if the new company will be able to call itself that. We do not take the name for granted. The name is an asset and has great value, especially abroad, but it is not taken for granted,” – Fabio Lazzerini, CEO, Alitalia newco

The airline name may change, but its service level to remain the same

While the new airline’s name may not be Alitalia in the future, one thing that seems already decided is its positioning in the market. In fact, Epoca Negocios also notes that Lazzerini has ruled out repositioning the airline to compete in the low-cost sector. Instead, it will maintain its positioning in the premium (full-service) market.

Alitalia To Remain A Full Service Carrier
It sounds as if Alitalia’s new leadership is settled on keeping the full-service nature of the carrier. Photo: Chris Loh/Simple Flying

Alitalia has been under government intervention since May 2017. This was due to a liquidity crisis that left it on the verge of bankruptcy. The airline has not been profitable for quite a long time, and has been on the lookout for new investors to turn its fortunes around. 

A challenging market to compete in

Europe’s single air transportation market – otherwise known as The European Common Aviation Area (ECAA) has intensified competition since the framework was created in the 1990s.

One of the biggest game-changers has been the rise of low-cost carriers flooding the market with cheap seats. easyJet, Ryanair, and Wizz Air are responsible for much of this phenomenon.

Wizz Air, Ryanair, Easyjet
If it became a low-cost carrier, the new Italian airline would have been up against some intense budget-carrier competition. Photo: Getty Images

Alongside this fast-paced scene is the intense competition between legacy carriers offering full-service, premium flight experiences. This ranges from British Airways on the western edge of Europe to Air France, KLM, Lufthansa, and SWISS on the continent. In addition to the European giants, the Middle Eastern carriers offer stiff competition when it comes to travel between Europe and Asia.

In addition to the great carriers already filling the skies, this new airline is taking form at a time when air travel demand is low, and there is an over-abundance of capacity across the world. It seems like no matter which direction this new Italian carrier goes; it will have the odds stacked against it.

Do you agree with “the new Alitalia’s” decision to stay a full-service carrier? Or should it pivot to the low-cost market? Or do you think something in between, similar to airBaltic, could work? Let us know your thoughts in the comments!