Have you heard of Meridiana? Chances are you haven’t, and that’s for good reason. They’re a small, nearly bankrupt airline in Italy with about 20 planes, half of which are ancient MD-80s.
For a while there have been rumors that Qatar Airways is considering buying a stake in the struggling airline. And those rumors are now being confirmed by Qatar Airways’ CEO, Akbar Al Baker. Via ansamed.info:
The CEO of Qatar Airways Akbar Al Baker said Thursday that the carrier was considering a tie-up with Italy’s Meridiana airlines.
“We have studied Meridiana carefully, we are in the due diligence phase,” said Al Baker.
“If we believe that we have synergies, we will be more than happy to help Meridiana, also to create jobs in Italy”. He told a news conference that Qatar Airways “is studying any opportunities to grow our business” and has a particular interest in expanding its presence in Italy.
Sardinia-based Meridiana has been struggling and in late April, reading an agreement with workers on safeguards to keep the carrier in business, the industry ministry said that pact would provide another 12 months of State-subsidized support for about 1,800 workers to prevent their layoffs.
So what could Qatar Airways’ motivation be to buy an Italian low cost carrier with an aging fleet which is on the verge of bankruptcy?
I suppose the simple answer is “monkey see, monkey do.” Etihad is buying a stake in Alitalia (which, crazy as it seems, I can rationalize — they’ll get a lot of soft political power out of that).
So clearly Al Baker had a “me too” moment. And I guess Meridiana are the leftovers… and who doesn’t love Italian leftovers? Yummm…
Al Baker points out that past performance isn’t as important as future performance:
Meanwhile, Al Baker said that past performance of a company is not necessarily as important as future results, he added.
“We are not interested in companies based on how they were handled, but if we invest we do create a corporate culture similar to ours,” he said.
While that’s technically true, past performance is a good indicator of future performance…
On the plus side, at least Al Baker seems to be able to relate to the employees of his own company in one way:
“Unfortunately, we are slaves to Italian authorities”.
Bottom line
I understand the general approach Middle Eastern carriers are taking when it comes to taking over foreign carriers. It’s less about making money on the airlines, and more about expanding their power. The more money they invest in other countries, the less friction there will be with their expansion plans. At least in theory. The fascination here with Italy seems especially odd, though, when there are so many other struggling European airlines which are potentially more promising.
I’ll be curious to see if anything comes of this.
Anyone have any other theories on why Qatar Airways is even considering getting tied up with Meridiana?
“monkey see, monkey do.”
Smacks a bit racist.
(Out and Proud German-Aryan categorizing Arabs).
With all the Middle east investment in Sardinia, this is a very smart and strategic move.
But if you've never been to Sardinia or know about that you'd probably question it as well.
There isn't much American Tourism, and I am fine with keeping it my secret.
Major Quartar clients want to go there and they need to have a footprint. So why not buy something already running.
It's not a bad airline....
With all the Middle east investment in Sardinia, this is a very smart and strategic move.
But if you've never been to Sardinia or know about that you'd probably question it as well.
There isn't much American Tourism, and I am fine with keeping it my secret.
Major Quartar clients want to go there and they need to have a footprint. So why not buy something already running.
It's not a bad airline. But typically we fly Air Berlin or BA to get to Olbia.
But we flew it some years back and had no complaints.
Thsi seems to be getting quite common, with Turkish seemingly interested to buy Air Malta as well.
http://www.timesofmalta.com/articles/view/20150517/local/air-malta-in-talks-with-turkish-airlines.568412
This is just one component of a much wider Qatari investment in Sardinia, for which Meridiana is the primary carrier. In their various guises they have bought up hotels, property developments, golf courses, etc over the last few years and are planning on developing several more.
The general stereotype is that Arabs are long on money and short on brains, but nothing could be further from the truth. Historically, Arabs are traders by nature and quite shrewd. In addition, their loads of money buys the best consulting in the financial world. The result is some pretty creative deals like this one. Trust me, they wouldn't be "throwing" money at an ailing airline unless they got something substantial in return. The key...
The general stereotype is that Arabs are long on money and short on brains, but nothing could be further from the truth. Historically, Arabs are traders by nature and quite shrewd. In addition, their loads of money buys the best consulting in the financial world. The result is some pretty creative deals like this one. Trust me, they wouldn't be "throwing" money at an ailing airline unless they got something substantial in return. The key -- and what many people forget -- is that those returns aren't always cash; they can be politics, slots, gates, clout, etc..
flyingfish already got it.. it's all about rights to/from Italy, to JFK and between Italy and JFK!!!
I believe perhaps we might be missing something here but in our perspective Qatar is playing in two fields, I guess. For start, IG uses Avios as their FFP currency which tells us that they might join IAG (or even OW in the future). This is huge for Qatar since they are BA's new allies in OW (after the termination of the JSA between BA/Qantas) and it will put them a stronger position within the...
I believe perhaps we might be missing something here but in our perspective Qatar is playing in two fields, I guess. For start, IG uses Avios as their FFP currency which tells us that they might join IAG (or even OW in the future). This is huge for Qatar since they are BA's new allies in OW (after the termination of the JSA between BA/Qantas) and it will put them a stronger position within the alliance. On the other hand, Qatar isn't looking at the airline per se, but to all the leisure market opportunities this stake may bring for them. In fact, IG flies to a lot of European destinations (Greek and Spanish Islands, for instance). So, if Qatar buys this stake, they will be able to reach numerous small markets in Europe. That's why this might be a smart move in the future for them.
Finally, the reviews and customer feedback we have at Travel Consulting Hub with this airline aren't by all means negative... but it all depends which airline you're comparing IG against...
Lucky, i looked up meridiana and it seems that this was actually a very interesting addition to avios ffp that no one really covered.
Perhaps u should do a review n also share how is availability like in awards for their longer haul premium class (and which other routes is using 767 besides jfk?), as well as shorter routes awards n cabins.
I think qr is quite smart here as what they plan to...
Lucky, i looked up meridiana and it seems that this was actually a very interesting addition to avios ffp that no one really covered.
Perhaps u should do a review n also share how is availability like in awards for their longer haul premium class (and which other routes is using 767 besides jfk?), as well as shorter routes awards n cabins.
I think qr is quite smart here as what they plan to do is buying meridiana's network (they got rights to JFK! N places like Male!), and increase the frequency n probably put bigger planes as well. EK has lots of issues with their mxp-jfk route.. but if its meridiana under qr.. cant say so much.
N EY being given the okay to buy alitalia means that meridiana will prob get same approvals.
On same note, Etihad's other step child is (slowly) preparing for direct US flights.
http://www.b92.net/eng/news/business.php?yyyy=2015&mm=03&dd=26&nav_id=93614
For anybody thinking Etihad is just throwing money anyplace that could stick, consider this: Etihad gave 10-year loan to Serbian government to buy new planes for Air Serbia in exchange for stake in Air Serbia. (JU has plenty of code shares in Europe as very few airlines are keen on wasting planes and crew-hours for BEG)
If crazy...
On same note, Etihad's other step child is (slowly) preparing for direct US flights.
http://www.b92.net/eng/news/business.php?yyyy=2015&mm=03&dd=26&nav_id=93614
For anybody thinking Etihad is just throwing money anyplace that could stick, consider this: Etihad gave 10-year loan to Serbian government to buy new planes for Air Serbia in exchange for stake in Air Serbia. (JU has plenty of code shares in Europe as very few airlines are keen on wasting planes and crew-hours for BEG)
If crazy idea with JU flies, Etihad gets dividends and connecting passengers. If JU idea does not fly, Etihad gets interest and loan back. Single-sided win-win?
@ Marija -- They're quite brilliant indeed!
My favorite quote from the Meridiana website comes from the Fleet page where they describe their antiquated MD-82's as:
"Built with the most recent and tested technologies with attention paid also to future environmental and ecological requirements."
Er...
@ Craig -- ROFL! Clearly written in 1982...
This actually strikes me as quite smart. They just want the footprint, gates and entree into the EU and Italy.
Qatar has the capital and organizational heft to completely remake the operation. The likely nominal price for the initial stake will be far less than the political challenges of trying to do this de novo.
I'll take your Italian leftovers, Lucky ;)
I wouldn't really consider IG to be an LCC - it's actually a decent full-service airline. I've been hoping that they might join oneworld sometime soon (since they partner in some form with most European OW members - in fact, their FFP even uses avios) - so hopefully this will all work out and IG will be one step closer!
Flew Meridiana MXP-CTA (Catania, Sicily) last year.... wasn't too bad, serviceable for a short flight.
They have an avios agreement with IAG, you can earn and spend on Meridiana.
Meridiana flies to JFK. I recently heard about them because friends booked them to Italy.