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Meridiana adds Verona to expansion

19-Oct-2010

Meridiana Fly and Italy's Verona Airport have signed a new agreement protocol in order to develop the airport and airline's services and to open new international connections. As part of the agreement, the carrier plans to launch Verona-Rome service.

While the fortunes of Alitalia have been making the headlines during the past two years, Italy’s second largest and privately owned airline has been quietly getting on with what it does best, which includes one of the highest punctuality levels in Europe.

Meridiana Fly is headquartered at Olbia’s Costa Smeralda Airport in Sardinia, but its operations are based largely at Cagliari-Elmas Airport, Milan Malpensa Airport and Rome Fiumicino airports. Secondary bases are Catania-Fontanarossa Airport, Florence Airport, Olbia - Costa Smeralda Airport, Palermo International Airport and Verona Airport, where the current expansion is taking place and where Meridiana Fly has 17% of capacity.

Merger with Eurofly pays dividends for both airlines

The airline was originally called Meridiana, but merged in Jan-2010 with Eurofly to form Meridiana Fly. Meridiana SpA had already been the majority shareholder of Eurofly with 60.7% of the equity. The merger plan called for the transfer of Meridiana's air transport activities to Eurofly, which increased its capital by EUR52.56 million. A EUR40 million share capital increase by way of rights option occurred following the merger. The new airline declared it would focus on medium and long-haul services, while peak short-haul and charter operations would be handled by a newly incorporated company Meridiana Express, which would exist within Meridiana Fly. The merger was formalised on 28-Feb-2010, with the company beginning operations with a fleet of 35 aircraft, including 17 MD82s, nine A320s, four A319s and two ATR 42s. Since then the ATRs have gone but, in keeping with the medium-long haul mantra, three A330-200s in Eurofly livery are now in service. (The aircraft will be painted with a new livery). Eurofly’s fleet was considerably younger than Meridiana’s, which averaged 17 years, but its finances were not in good shape. It had reported a net loss of EUR23.3 million in the 2009 first half, widened from a EUR14.9 million deficit in the previous corresponding period.

Meridiana was founded as Alisarda by the Aga Khan – the 49th and current Imam of the Shia Imami Nizari Ismailis, Prince Karim al-Hussayni – in 1963. It was set up as an air taxi and charter operator to promote tourism to Sardinia, which is now an upmarket tourist resort island. Scheduled services began in 1964 from Olbia. In 1989, 35% of new stock was released to new shareholders to strengthen the company and the name Meridiana was adopted in May-1991. The first international services were operated later in 1991 to Barcelona – at the time, one of the few Italy-Spain services that were not offered by either Iberia or Alitalia – also Paris, London and Frankfurt.  The initial 29.95% stake in Eurofly was acquired in Dec-2006. Meridiana Fly is now owned by Interprogramme Holding SA of Lugano, (57.19%), SA Aga Khan (17.59%), employees (16.08%), Airfin (in liquidation) (4.51%), Fondazione Cariplo (3.39%) and other shareholders (1.24%). The airline is also publicly listed on the Milan Stock Exchange and claims to be the only Italian airline listed there presently.

It offers domestic flights, also to Europe (as Meridian Eurofly), Africa, the Indian Ocean and Middle East (charter) and North America, with seven intercontinental destinations, 48 international destinations (Europe and surrounding countries) and 32 domestic ones.

Meridiana Group’s organisational chart.

Meridiana Fly is quick to promote its punctuality achievements, for example at Verona, where the level is 80% and a regularity level of 99%, claimed to be one of the highest in Europe. It intends to increase its existing schedule of 22 destinations at Verona.

Verona claims one of the largest catchment areas

Verona-Villafranca Airport is an international airport serving the city of Verona in the Veneto region of northern Italy. The airport is served by a wide mix of low-cost and full-service airlines from across Europe, including Air France (Regional); BA; Lufthansa Regional (Italian subsidiary Air Dolomiti); Ryanair (which is expanding this northern winter); Germanwings and Vueling, as well as the Italian charter airline Neos, which has a large programme. It is situated in the middle of the provinces of Brescia, Mantua, Rovigo Vicenza, Trento, Bolzano and Verona itself, serving a population of more than 4 million. Verona Airport President, Fabio Bortolazzi, claims that the catchment area is one of the largest at the national level and that companies in the area have a much higher exposure to foreign markets compared with the national average: in Verona nearly 82%, while the national average percentage is 49%.

The region is also able to attract significant tourist flows thanks to the towns being of artistic interest (it is one of the main tourist destinations of northern Italy), also the natural landscape of nearby lake Garda and the Dolomites. Verona has registered nearly 3.2 million incoming tourists per year, the Verona area around the lake recorded more than 2 million and the Trentino region registered over 3.1 million incoming travellers in 2009.

In 2009 traffic at Verona Airport was 3.06 million (-9.9%).


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