Italy’s ITA Wants The Same Airport Incentives That LCCs Get

In 2019, smaller Italian airports eager to attract foreign travelers reportedly offered €400 million in subsidies to low-cost carriers. The chairman of Italy’s new national airline, ITA, said on Thursday that there would be a ‘blood bath’ if the airline tried to regain market share without the same incentives.

ITA believes the subsidies offered to low-cost airlines to operate to smaller Italian airports are creating an unfair competition environment. Photo: Getty Images

New Italian flag carrier ITA has now been operating for just over three months. Its first flight took off on October 14th last year, carrying passengers from Cagliari to Rome. The first long-haul service took off from Fiumicino to New York JFK about three weeks later.

Despite Alitalia’s debt-laden history, ITA – Italia Transporto Aero – has big wings to fill. However, it is facing fierce competition on its domestic market from low-cost carriers eager to fill the space of the former national airline before the new one gets properly off the ground.

Citing unfair competition

To defend against the rather aggressive approach of budget airlines such as Ryanair, Wizz Air, easyJet, and Volaris, ITA wants to receive the same incentives that small Italian airports and local administration have been providing for the low-cost carriers.

Speaking to a parliamentary committee on Thursday, ITA Airways Chairman Alfredo Altavilla stated that in the 2019 budget, low-cost airlines received nearly €400 million ($454 million) in subsidies. These were paid by smaller airports in Italy that compete for foreign travelers.

“The competition is unfair … we risk a blood bath if we try to regain market shares in airports where budget carriers enjoy incentives we don’t have. We want the same incentives that are paid to low costs,” Altavilla said as reported by Reuters.

In 2019, budget airlines reportedly received €400 million in support from local Italian administrations competing for foreign tourists. Photo: Getty Images

Cutting short domestic routes might be on the cards

Currently not small airports’ greatest fan, Altavilla also told parliament that shorter domestic routes might need to be banned in order to cut down on medium-term CO2 emissions.

This is a solution already employed by France, which last year in March became the world’s first country to prohibit domestic flights where train connections of under two and half hours are possible.

Meanwhile, the new airline’s chairman also said that ITA had posted a negative operating result of €170 million ($192 million) in the first two months and a half to the end of the year. Job costs accounted for 14% of the total amount.

The Alitalia successor has started off with half its predecessor’s fleet and €170 million in losses. Photo: Vincenzo Pace | Simple Flying

Despite the challenging, to say the least, year of 2020, according to Statista, Alitalia was the leading airline on Italian domestic routes with just under 4.4 million passengers. However, Ryanair came a close second. with just under 4.1 million. Then there was a larger gap down to Volotea with 1.5 million, and easyJet with 1.45 million passengers.

What do you think of Italian airports subsidizing budget carriers but not ITA? Leave a comment in the section below. 

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