Qatar Airways CEO: Meridiana To Rebrand As Air Italy

A bit over two years ago, Qatar Airways announced their intentions to invest in Meridiana, Italy’s second largest airline (which isn’t saying a whole lot). The airline has a fleet of just 16 planes, consisting of 737s, 767s, and MD-80s. It’s an outdated fleet, to put it mildly.


Meridiana’s outdated 767 business class

It took quite a while for Qatar Airways’ 49% stake in Meridiana to be finalized, as the deal only closed in late September. While some of Qatar Airways’ other airline investments are hands off, that’s not the plan with Meridiana. With Alitalia on the verge of liquidation, Qatar Airways is determined to “massively grow” Meridiana, and turn them into Italy’s “national airline.” Over the next six months Qatar Airways plans to send some 787s, A330s, and 737 MAX aircraft to Meridiana, to help them grow their fleet.


Qatar Airways A330, which may soon be flying for Meridiana

Not only does Qatar Airways want to give Meridiana new planes, but they also want to help the airline rebrand. CAPA quotes Qatar Airways’ CEO, Akbar Al Baker, as saying that Meridiana will be renamed Air Italy, because “we really want to be the national carrier of Italy, serving the Italian public.”

The funny thing is that most Meridiana flights are already technically operated by an airline called “Air Italy.” In 2011 Meridiana Fly (as it was called back then) acquired Air Italy, and it’s now a wholly owned subsidiary of Meridiana. Heck, when I recently flew Meridiana business class from Naples to New York, the safety cards even said “Air Italy” on them.


Some Air Italy branding can already be found on Meridiana flights

I can certainly see merit to the airline being rebranded as Air Italy, both to give the airline more brand recognition by association with the country, and also to give it a clean slate, since Meridiana doesn’t have a great reputation. With a fleet of new A330s and 787s, this could be a radically different airline a year from now.

The part I still don’t get is how Meridiana is going to avoid making the same mistakes Alitalia did. As of now Meridiana is quite a small airline, but if they want to grow in any sort of significant way, they’re going to face a lot of challenges, and they’re going to have to do things differently than Alitalia did.

Then again, Alitalia may never go out of business, as they keep getting more loans from the government.

What do you make of Meridiana being rebranded as Air Italy?

Comments

  1. Alitalia is not in the brink of liquidation. As you said in a previous article the government will never allow the company to go bankrupt.
    Moreover the three managers appointed for the extraordinary administration are doing an amazing job. In the second semester the company still have 850 million euros of the 900 given by the government and they implemented new long haul routes cutting less profitable ones. Alitalia is a solid company and I’m sure we will see it fly more

  2. @Francis: The issue is that the Italian government will have no option at some point to let Alitalia go bust. Endless pouring in money will be an illegal subsidy under EU law and will not receive authorisation.

    And I beg to differ Alitalia is anything but a solid company. In its operating history, the years it made a profit can probably be counted on two hands.


    The name Air Italy is boring. Why not be creative? BTW I’d love a Qatar Airways level of service on an Italian airline. Just imagine the menu. Mmmmmmmmhhhh.

  3. Air Italy is a very clunky sounding name. Alitalia is very slick in comparison. What about Sicilian or something like that?

  4. @Ben – I agree it’s a little clunky, but something like Sicilian wouldn’t work if they are trying to brand as a national carrier. Italy is very regional, with strong regional identities. If you name it as such, it won’t take on a national feel in a place where the majority identify first with their region/city/comune, and then their country. It’s likely part of why they want to get away from Meridiana as well, which has a southern connotation. That’s not to say they couldn’t come up with something better than Air Italy.

  5. Sad. I’m all for Meridiana becoming a better carrier but personally I really like that name. Air Italy is so ugh. Italy might not exactly have a portfolio of stunning and successful carriers but you can’t deny: Alitalia & Meridiana are some of the most elegant and sleek names in the industry.

  6. I continue to be skeptical about this. I just can’t see what Qatar can do differently with Meridiana than what Etihad did with Alitalia. In fact, I think Qatar has the even greater challenges of having to convert the Alitalia fans (of which I believe there to be many) and also to re-create an extremely outdated airline.

  7. First of all: Alitalia is not let to its destiny because it is a strategic asset for the national economy: Italy is not Switzerland or Belgium, domestic flight are needed to cover most of the country: without Alitalia, some areas of the country would be denied a good connecting flight for a major hub. So, you can’t just let it disappear, the damage would outweigh any loan that the government may give. Not to mention the damage for tourism, as all the slots left by AZ wouldn’t be magically filled in one day.

    Meridiana is the “national” carrier of Sardinia. Its original name was Alisarda (more less, “Sardinian wings”). It owns Air Italy, but keep in mind that Air Italy still exists as a company, it is simply owned 100% by Meridiana, but its carrier codes are still operational: that’s why you found the brand name on the safety cards: technically speaking, the flight was not operated by Meridiana.

    The reasons of Alitalia not being profitable enough are plentiful, but basically they are
    – insufficient high yeld routes (the JV with AF and Delta prevented expansion in the North American market, which is the most profitable)
    – high costs (leasing aircrafts at rates 20-30% higher than other carriers)
    – delay in turning into a long range-focused airline, suffering for the competition of low cost carriers
    – hard competition from high speed trains for the local market: Italy has among the most efficient and conveniently priced high speed trains in Europe, and due to the shape of the territory, HS railways cover all the major cities of the country (basically, two main lines cover 80% of the population) , thus making the domestic point-to-point market pretty much limited to the main islands and remote seaside locations. This is getting even worse with the new trains which are getting delivered, providing a faster service between Milan and Rome than any aircraft could do
    – Italian local administrations, showing the red carpet to Ryanair to operate from their respective secondary airports and take over the short range market
    – The personnel is surely part of a problem, both in terms of attitude (I wouldn’t say quality: the FA are all experienced and undergo a very hard training) and costs, but it’s not by far the main part

    As you see, you must know the country to make a proper analysis.
    My doubt is: since AZ will not leave for good, how is the new Meridiana / Air Italy supposed to take the market? There is no real hub to use for connections. Perhaps it will try to launch point to point flights from airport served by QR and BA, such as Venice or Pisa.

  8. If Alitalia keeps its FF program, its customers base will remain loyal. With return business award Italy/USA at 80.000 miles (and for a paid business ticket you get 300% of the mileage), despite the low award seat availability, which can become 40.000 when used with a companion (featured of AZ branded Amex), the new line will have to struggle and give good conditions too

  9. @Daunt:

    Interesting points. That’s the most in-depth, blog-based coverage I’ve seen that looks outside the normal airline industry. What do you say in response to @Lord potato’s comment that The issue is that the Italian government will have no option at some point to let Alitalia go bust. Endless pouring in money will be an illegal subsidy under EU law and will not receive authorisation.

    Where do you think that will fit in notwithstanding train connections and the requirement for maintaining intra-Italy point-to-point connections?

  10. I hope they do not bring on the Qatar menu – who needs more mezza or fried tofu. Good quality Italian food would be so much better than the طعام سيئ taeam sayiy served on Qatar.

  11. The EU commission has clearly stated that a loan at market rates is not a subsidy. It would be a subsidy if the loan were at a lower rate than what a company could get from banks. In this case, the state helps because Italian banks are not currently in the position of granting such a risky loan, but in the (unlikely, to be honest) event that the debt is paid in full, the Italian treasury pulls out a profit. The most likely outcome will be that the debt will be paid in part. And the result will be that, for a portion of the money spent, the state will have avoided a bigger loss in terms of social costs (special unemployment compensation for everyone, and employees would not hurry too much in finding a new job), damage to the economy and damage to tourism.
    In this case, the loan has been granted to make the company survive until a buyer is found. The buyer (probably LH, but there may be surprises) will reduce redundant operations and decrease some costs but will continue the flight activity, as AZ long range flights have an excellent occupancy ratio (Italy is a high income country with 60M people, it’s not a small market) and most assets of the company are in good conditions (newly refurbished business class, new lounges, new branding, very profitable FFP). So, it made much more sense to grant a loan and sell the company, rather than letting everything go legs up. Also because you can’t leave two important regions like Sardinia and Sicily with almost no connecting flight to a major hub, it’s madness. HS trains provide good point-to-point domestic connecitons, but they do not include the major airports in their network, so they cannot integrate the loss of feeder flights. It’s not Germany, where LH could easily step in to replace AB.

    @alan Qatar serves also local food, depending on the departure. When departing from Italy, they serve very good Italian dishes. I’ve had a tremendous ossobuco in the VCE-DOH flight.

  12. Ben- I thought you were more cosmopolitan than that. Sicilian? Really? You obviously don’t spend enough time on the ground after all the flights you take. Using a name like Sicilian would be a death sentence for the airline. The Northern Italians (who are the ones with most of the money) would never fly an airline called Sicilian as many of them don’t even consider Sicily as 100% part of Italy.

  13. The 19.2 in Milan press conference for the presentation of Air Italy (Meridiana name will be not used soon) new mission as hub carrier based on Milan Malpensa.
    One of the reason of the disasters of Alitalia was de decision to try to create an hub on Rome FCO airport.
    Al Baker will attend the press conference and all press and Italian media are invited.

  14. I understand change happens but this is no way to go about it. The new flight schedule is terrible. Not only is the JFK – PMO route no longer a direct flight but you have to sit at MXP for 7 hours! They took the only thing that made it an attractive airline and dismantled it. Time to go back to flying Alitalia.

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