Italia Transporto Aereo (ITA), needs an alliance to expand its network and become efficient, Italy’s deputy economy minister said, citing Lufthansa, Air France – KLM, and Delta as possible partners.
According to declarations reported by Reuters, «Activities are underway to identify a long-term strategic partner,» said Minister Laura Castelli, who added that the Italian government is seeking an «alliance on equal terms» for the state-owned airline.
Alitalia is part of Skyteam airline alliance with Air France, KLM, and Delta, but ITA will have to negotiate from scratch and could look for new partners.
Alitalia’s strategic partners
The most significant international markets in Alitalia’s network were the United States, Japan, Brazil, and Argentina, where it had different allies to strengthen its international connectivity. The Italian airline was a member of the transatlantic Joint Venture established with Delta, Air France, KLM, and Virgin Atlantic, in which it participated as a secondary partner.
Alitalia also had strategic partnerships outside Skyteam such as All Nippon Airways ANA in Japan and GOL Linhas Aereas in Brazil, as well as code-sharing and further cooperation with alliance partners such as Aerolineas Argentinas.
ITA’s potential partners
ITA recently announced the start of its intercontinental operations by November 2021, opening routes to the United States. The carrier is negotiating to establish international partnerships, in particular with Delta Airlines and Lufthansa Group, the respective CEOs, Ed Bastian and Carsten Spohr, confirmed talks with the airline during the IATA General Assembly in Boston.
The agreements would include codeshare, interline, and a joint venture under consideration. Lufthansa Group’s trans-Atlantic Joint Venture is made up of United Airlines and Air Canada, but neither carrier has expressed intentions to make an equity investment, at least for now.
«ITA has other issues to resolve before launching [a partnership], of higher priority than identifying international partners, but we are in dialogue», says Ed Bastian, CEO of Delta Airlines.
«We have no intention of bidding for the Alitalia brand, with which we have had a significant partnership for years», he added.
Lufthansa CEO Carsten Spohr defines Italy as the second most important market after the United States for the company, so a partnership with ITA would be «natural». The two airlines had already discussed an agreement at the end of September during a meeting in the presence of ITA CEO Alfredo Altavilla.
A strategic alliance with Lufthansa Group could be beneficial for ITA. The group has a regional subsidiary in Italy: Air Dolomiti based in Verona. To compete against the region’s Low-Cost operators such as Ryanair, Easyjet, and Wizzair, the German carrier could expand the operations of Eurowings and Edelweiss to serve the country’s main leisure markets.
The group’s main airlines, such as Lufthansa, Austrian, Swiss, and Brussels, have a strong presence in the most important Italian destinations; in addition, its transatlantic alliance with United Airlines and Air Canada could benefit ITA by allowing it to increase its presence in the main destinations in North America.
ITA will start operations on October 15, 2021, with an initial fleet of 52 aircraft and 2,800 employees, but is expected to gradually increase to 105 and 9,650 in the coming years. The new airline has already announced its intentions to acquire new aircraft from European manufacturer Airbus.
ITA’s network will be «oriented towards the operation of long-haul routes» compared to Alitalia, said Minister Laura Castelli. She added that the airline’s business plan should break even and achieve operating profits in the second or third year of operation.
