Alitalia has tentatively agreed to merge with Wind Jet and Blue Panorama Airlines. According to AGI reports, Alitalia has signed a MoU with both Italian carriers to this effect. Wind Jet is a LCC operating short haul European services and Blue Panorama operates charter and scheduled services from its Rome and Milan bases. According to Innovata data, Wind Jet and Blue Panorama hold 10.6% and 2.9% of Italy’s domestic capacity, respectively.
Alitalia to merge with Wind Jet and Blue Panorama Airlines
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Rome Fiumicino Airport: Vueling, Ryanair, easyJet and Alitalia are locked in mortal combat
Just as Rome was not built in a day, the battle among the airlines at its main airport will also take its time to play out.
A year ago, CAPA examined the growing levels of competition at Rome Fiumicino. The fight was not only between the disruptive LCCs and the well-established, but struggling, Alitalia. It was also increasingly between the LCCs themselves. At that time, Ryanair had just entered the airport for the first time, Vueling was about to establish a new base and to inject massive capacity growth there and easyJet also planned strong growth. Alitalia faced further erosion of its market share.
A year on and the battleground continues to be fiercely contested. Vueling plans further huge growth this summer, Ryanair is to transfer more routes to Fiumicino from Ciampino and easyJet, while taking a relative pause for breath, is still set to grow capacity at a double digit rate this summer. Alitalia's share continues to fall, but at least it has ensured its survival after receiving an investment by Etihad.
CAPA Outlook 2015: Western Europe - Uncertain impact of lower fuel prices to determine the outlook
The economic backdrop in Western Europe was sluggish in 2014 and remains fragile into 2015. In particular, the eurozone nations continue to struggle to recover fully from the global recession. A Jan-2015 poll of economists conducted by the Financial Times suggests that most experts expect GDP growth in the eurozone to be around only 1% in 2015.
This is a little better than 2014, but well short of the cyclical peak growth rates in excess of 3% that have not been seen since 2007.
For 2015, the two most important strategic issues facing Western Europe’s legacy airlines, particularly the Big Three flag carrier groups, will be restructuring in their core businesses and maximising their low-cost vehicles.