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Troubled Italian Carrier

Lufthansa wants Alitalia to join Star Alliance

In front of the Parliament in Rome Lufthansa explained how it would lead Italy's troubled national airline to success. The ideas are already quite concrete.


Alitalia and Lufthansa jets

A company from Italy and one from Germany – can that work out well? Lufthansa manager Jörg Eberhart tried to quickly eliminate doubts about an insurmountable cultural divide. «Italian and German culture complement each other perfectly,» he said on Tuesday (January 7) in front of the Transport Commission of the Chamber of Deputies of the Parliament in Rome.

By sending Eberhart to Rome, Lufthansa is sending a manager who not only knows Italy very well through his work as head of Air Dolomiti, but also speaks the language fluently. The Italian creativity, flexibility and innovative strength together with the long-term planning orientation and thoroughness of the Germans would make the perfect mix, said Eberhart.

Codeshare flights

However, Lufthansa is currently not prepared to invest in Alitalia, Eberhart explained. The company first wants to enter into an «equal commercial partnership» with the Italian airline. What sounds vague has already been very thoroughly planned in Frankfurt, as the remarks to the parliament showed.

As part of the cooperation, the two airlines would coordinate their flight schedules, start codeshare flights and coordinate sales, Eberhart explained. This could be implemented within six to nine months. Then Alitalia would also have to change alliances – i.e. switch from Skyteam to Star Alliance. That would take at least 18 months.

Switch to Miles and More

That wouldn’t be all. The switch to the frequent flyer programme Miles and More would also have to be carried out, as well as the merger of the IT systems. Eberhart reminded the parliament that the company had experience in such matters and referred to the integration of Brussels Airlines, Austrian Airlines and Swiss into the Lufthansa Group.

But the restructuring of Alitalia must be the first step, said Eberhart. The problem of continuing losses had to be tackled quickly. Special administrator Giuseppe Leogrande will deal with this in the coming months.

Job cuts «Ultima ratio»

The Lufthansa manager believes that much could already be achieved by renegotiating contracts and increasing the number of hours staff and aircraft are deployed. Only if Alitalia was still making losses after that would job cuts become an issue, Eberhart said. «This is just the ultima ratio.»

But why is Lufthansa interested in Alitalia at all? The Italian airline also has a premium claim and the Italian market is interesting, says the manager. But that’s not all. At its four existing hubs in Frankfurt, Munich, Vienna and Zurich, Lufthansa can no longer grow without limits, Eberhart explained. «We therefore need a fifth hub, one in southern Europe.»

No to Milan hub

And with Rome-Fiumicino, Alitalia would have a good hub. “The airport has developed very well in recent years,” Eberhart said. It is now one of the best in Europe.

Milan-Malpensa is not suitable, however, believes Lufthansa. The purchasing power of the population in the area surrounding the northern Italian metropolis is higher and the catchment area is larger than in Frankfurt. But with two airports, Milan generates too little feeder traffic for long-haul flights.

Later… perhaps

Although Lufthansa is not interested in buying a stake now, it may well be interested in doing so later. If Alitalia is doing well again, this could become an issue, said Eberhart. Whether the government will go along with it, however, is still unclear. Recently it announced that it was also talking to the state railway Ferrovie dello Stato, Delta and Air France-KLM.

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