Last year Etihad bought a 49% stake in Alitalia. Buying large chunks of struggling airlines seems to be about half of Etihad’s expansion plan. I’m guessing the primary motive there is to expand their “soft” political power as much as possible. After all, how much can European and Australian airlines really complain about the Gulf carriers when they’re partly owned by said airlines? 😉
The Etihad stake in Alitalia was especially interesting, as it was a bigger investment than Air Serbia, Air Seychelles, and Aer Lingus. Also, Alitalia is sort of a hot mess. A really, really hot mess.
Well, it looks like Etihad has high hopes for Alitalia, as they want to transform Alitalia into a five star airline in the coming years. They realize the only way to make money is to downsize and focus on the premium market, so they’re working towards attracting more business class passengers.
Via Bloomberg:
The CEO, who cuts a wiry figure in his cropped hair and tailored suits, plans to invest 700 million euros ($769 million) over the next three year, half of which will go toward a complete overhaul of the fleet, starting with two new Airbus A330 wide-body airliners to be unveiled in June. Another 100 million euros will be invested for technology.
Cassano has the backing the political elite and of Etihad’s Hogan, whose company led a 1.76 billion-euro investment to revive the company. That lifeline didn’t come without some demands: Alitalia had agreed to cut 2,000 jobs, even before an accord was sealed.
By 2017, all Alitalia planes will offer Wi-Fi, better food, and new business-class seats decked out in leather, probably from high-end Italian furniture manufacturer Poltrona Frau. Cassano said he’s also considering a refreshed livery design to reflect the company’s rebirth.
So Alitalia will be getting some new longhaul A330 aircraft, and beyond that plans to install new business class seats, better food, and offer Wi-Fi throughout their fleet.
The irony? Alitalia actually already has an excellent business class hard product for transatlantic flights. And their catering is fantastic as well, at least in business class.
So the areas they’re looking at improving in are ones where they’re already well above average.
Not mentioned in their plans to transform into a five star airline are:
- Rome Airport, which gives London Heathrow or Paris Charles De Gaulle a run for their money in terms of crappiness; they really need more fast track queues for immigration/security if they want to attract premium customers
- Alitalia’s terrible lounges in Rome
- The indifference of many of Alitalia’s staff
In terms of Alitalia’s growth plan beyond their onboard product, they’re trying to greatly expand service to Asia through a Chinese codeshare partner, and also have Etihad start service to more cities in Italy, allowing more one stop connectivity from Italy to the world:
For his long-haul expansion, Cassano is focused on attracting customers in fast-growing countries in Asia. Alitalia is in talks for a code-share agreement in China in order to reach the country’s 30 top destinations with the help of a local partner. Alitalia will also add routes from Bologna and Catania in Italy to Abu Dhabi, from where passengers can connect on Etihad flights to Africa, India and Australia.
Bottom line
It’ll be interesting to see what kind of a transformation Alitalia undergoes under the guidance of Etihad. Ultimately becoming a “five star” airline sounds a bit aspirational. Personally I don’t think there’s any European airline which is truly “five star,” and something tells me Alitalia won’t be the first. 😉
What changes do you think Alitalia has to make in order to become a competitive airline?
I hate Alitalia, especially that elderly steward that was rude to the point of yelling at us to fasten the seatbelts properly. Dear blond and slightly obese elderly stupid man: if you don't like your job, quit it.
Has anyone else met that rude, grumpy monster of a steward at the Buenos Aires-Rome connection?
I do often Alitalia in short and medium haul flights and the service is just terrible. No enforcing of priority lines at boarding, always transfer by bus at fiumicino, indifferent and rude staff, crackers as food, no booze and very limited drinks selection, dirty airplanes, etc... AF, LH, even Air Berlin much better. They have a big learning curve to improve.
I've taken a few flight on Alitalia in the past inter Europe via their Magnifica or business class. The flights were out of FCO and VCE. Each flight had very good service, seats were spacious and food/wine were incredible. I was also surprised that the flights were either on time or had early arrivals. I was always anticipating the worst, but was really pleasantly surprised by my experiences.
"Alitalia will also add routes from Bologna and Catania in Italy to Abu Dhabi, from where passengers can connect on Etihad flights to Africa, India and Australia."
Seriously, Bologna and Catania? How many passengers in Bologna and Catania are on their way to India?
And I'm with Wayne, have you changed your tune about LH FC?
@ Robert Hanson -- I assume it'll be an A320, so I doubt they'll have issues filling it. While I think Lufthansa first class is a five star product, I don't think their economy or business class cabins are.
*wish
+1 on with Virgin Australia would join *A
I think only Lufthansa has a 5 Star potential in Europe - at the moment. They have a first class already 5 star rated, Alitalia hasn't even a first class. Massive improvements are being made and its their pronounced goal to be the first 5 star airline in Europe. Swiss has also potential and maybe even Air France. The first goal for AZ should be to get a 4 star rating - the only have...
I think only Lufthansa has a 5 Star potential in Europe - at the moment. They have a first class already 5 star rated, Alitalia hasn't even a first class. Massive improvements are being made and its their pronounced goal to be the first 5 star airline in Europe. Swiss has also potential and maybe even Air France. The first goal for AZ should be to get a 4 star rating - the only have 3 stars. and please change the attitudes of most of their employees, work on reliability and improve economy class on long hauls dramatically!
Have an upcoming flight on Alitalia from Casablanca to Rome in their short haul business class. What should I expect in terms of catering, service etc.?
@ Tar_00 -- Expect great catering, economy seats with a blocked middle seat, indifferent service, and don't count on punctuality.
Can't stop think about a scene from "Mean Girls":
- Alitalia is so fetch!
- Etihad, stop trying to make Alitalia happen, is not going to happen!
Being fair, don't think Alitalia is too bad nowdays, they had worst days already, but I'm really curious to see the next chapter of the Etihadation of an Europen carrier.
I flew Air Serbia about a year ago and they were amazing! They had 2 delicious choices of meals in economy for a 2 hour flight!
God Fiumicino sucks, litterally the definition of a clusterfuck.
The etihad alliance is annoying me because I want Virgin Aus to join the Star Alliance, they already partner with SQ and NZ and now SA. So frustrating.
Rome Airport??? Never heard of it. Did it replace Fiumicino and Ciampino?
@Jim: In fairness, only Air France is struggling. The KLM component is doing just fine. I think you're more likely to see the Dutch government force a de-merger than allow a virtual takeover by Etihad.
Color me shocked. I wrote Alitalia's obituary several times in the not so distant past.
Alitalia is a fantastic SkyTeam redemption; Food really is terrific, and the wine is out of this world good. Loved my flight to Rome from JFK; just skip their partner club, and go to the Air France lounge at JFK instead.
In my opinion,the only airline that will have a 5-star rating in Europe is Lufthansa. It's the only airline with a (already) 5 star First Class, their Business Class hardware is beeing upgraded and their new signature service will make a significant difference in the onboard service product. I think their new intra European catering is among the best in the region (better than Swiss but maybe not as good as Turkish). Their new Premium...
In my opinion,the only airline that will have a 5-star rating in Europe is Lufthansa. It's the only airline with a (already) 5 star First Class, their Business Class hardware is beeing upgraded and their new signature service will make a significant difference in the onboard service product. I think their new intra European catering is among the best in the region (better than Swiss but maybe not as good as Turkish). Their new Premium Economy is among the best in class and the Economy Class is also among the best products. I've used Alitalia only in Economy Rome to Buenos Aires in 2014 and it was terrible. The staff, the food, the dirty plane. An Lucky: Alilatia is only a 3 star Airline, Business may be 4 star, but without First Class and significant changes in staff attitued and reliability no way for 5 star in the next 10 years...
I wouldn't be surprised Ben if Etihad buys a stake in Air France-KLM in the near future. Given the struggles the company is in, which they are in for many years now...
Craig, I assume your favorite American carrier is Singapore Airlines?
Lucky, so you don't think Lufthansa is a five star airline? Sounds blasphemous! Hahaha!
i agree Alitalia's catering and seats in Magnifica (business class) is already competitive. the game changer would be to change its reputation as an airline that's always late/delayed.
@Craig
how is Thai Air "better European carrier"? for the sake of this country i hope you were not a geography major.
I would say the only way to even hope to be a five-star airline is to offer a first class product, which they will not be doing. At least right now, for the better European carriers, we have Swissair, Thai Air and Lufthansa, and they don't compare to the Asian and Middle East carriers. Am I missing anybody?
Maybe this will mean real champagne instead of prosecco I could buy at Trader Joe's for $8.99?