Air Italy S.p.A. is a scheduled and charter carrier headquartered in Gallarate, Italy. The airline was established in 2005 by a consortium of investors to serve leisure markets across Africa, the Indian Ocean and the Caribbean. In Jul-2011, the airline announced it would merge with fellow Italian carrier, Meridiana. The merger was completed in Apr-2013. Air Italy remains under its own Air Operator's Certificate and operates services on behalf of Meridiana. Air Italy is largely based at Milan Malpensa Airport, also a hub of parent, Meridiana.
Location of Air Italy main hub (Milan Malpensa Airport)
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Etihad's planned investment in Alitalia has attracted most of the aviation headlines in Italy recently. But what of Italy's number two indigenous airline, Sardinia-based Meridiana?
Together with its subsidiary Air Italy, Meridiana has a market share of 4% ranked by the number of scheduled seats to/from Italy in the week of 21-Jul-2014. The 2013 annual report of its parent group reveals that it narrowed its losses last year, by lowering cost per passenger more quickly than the fall in revenue per passenger.
Nevertheless, with strong LCC competition continuing to grow, revenue per passenger is likely to remain under pressure and Meridiana will need to find further cost efficiencies if it is to return to profitability. Recent industrial action over plans to outsource part of its operations to other airlines and over its redundancy programme highlight the scale of the challenge in achieving this.
Meridiana fly and Air Italy, two of Italy’s smaller players, have announced their intention to merge and create a “stronger player in the Italian leisure and charter market”. The merger is another key strategic move in the Italian air transport market, which has been in near constant flux since the demise of the former Alitalia.