Airberlin (Berlin-Tegel) and Alitalia (2nd) (Rome) have signed an extensive codeshare agreement. The agreement covers all 412 weekly nonstop flights between Germany, Austria, Switzerland and Italy for this winter season. Etihad Airways has a 29.21 percent stake in Airberlin and a 49 percent stake in the revamped Alitalia.
Airberlin has issued this statement:
Airberlin, Germany’s second largest airline and Alitalia, Italy’s leading carrier, have signed a codeshare agreement to offer more choice and greater convenience to their guests. All of Airberlin’s and Alitalia’s 412 weekly nonstop flights between Germany, Austria, Switzerland and Italy will be codeshare flights effective this winter season.
As of October 26, Airberlin’s three daily flights from Dusseldorf and double daily flights from Berlin-Tegel will operate into Milan-Linate instead of Malpensa. Furthermore, the three daily flights from Vienna operated by Niki (Vienna), the Austrian airline which is part of the Airberlin group, will be directed to Linate as well.
The partners also agreed on selective codeshares beyond their home hubs. For instance Alitalia will place its “AZ” code on some of Airberlin’s domestic flights such as from Munich to Cologne, Dusseldorf, Hamburg and Berlin. At the same time Airberlin will place its “AB” code on selected domestic and international Alitalia flights via Rome and Milan-Linate to, for example, Naples, Brindisi, Reggio Calabria, Alghero, Cairo or Malta as well as on some of Alitalia’s long haul flights to South America such as Sao Paolo and Rio de Janeiro. All codeshare flights will be published in the reservation systems by October 20, 2014 for flights commencing October 26, 2014. Codesharing on Alitalia’s long-haul connections will commence after regulatory approval.
Besides the new codeshare services and more convenient flight connections, Airberlin and Alitalia have signed a frequent flyer agreement which allows their guests to earn and redeem bonus miles on the entire route network of both airlines on a reciprocal basis for flights starting on or after November 1, 2014.
The cooperation of Airberlin and Alitalia is a result of long-term planning over the last couple of years and also of more liberal alliance governance which permits partnerships across alliances borders. Both, Airberlin and Alitalia will remain members of oneworld® and Skyteam respectively. Further synergies will arise from optimized aircraft rotation and avoidance of expensive overnight aircraft stops.
Top Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Airberlin’s Airbus A320-214 D-ABFK (msn 4433) in the special Fan Force One Bitburger touches down in Basel/Mulhouse/Freiburg (EuroAirport).
Alitalia (2nd) (Rome) as planned, retired the Air One (Rome) brand on September 30. As of today, the former Air One services are now being operated under the Alitalia brand although the parent will only operate some of the routes. Alitalia will assume some of the routes at the end of this month with their own branded aircraft per Airline Route.
Copyright Photo: Dave Glendinning/AirlinersGallery.com. Airbus A320-216 EI-DSW (msn 3609) taxies from the gate at London’s Heathrow Airport (LHR).
Air One (Milan-Malpensa) will disappear as an airline and a brand on October 1. Parent Alitalia (2nd) (Rome) has decided to streamline its operations under one name and will retire the Air One brand on this date.
Air One commenced operations on November 23, 1995. On January 13, 2009, Air One officially became part of Alitalia Group with the intent to merge the two airlines. Air One in the meantime was rebranded as Air One “Smart Carrier”, Alitalia’s lower-cost subsidiary, operating a fleet of nine Airbus A320-200s to 35 destinations in 12 countries.
All Air One routes from Catania, Palermo and Venice will cease to operate on September 30, 2014 while all remaining services from Milan (Malpensa), Verona and Pisa will be dropped on October 30, 2014.
Copyright Photo: TMK Photography/AirlinersGallery.com. Airbus A320-216 EI-DSW (msn 3609) taxies at Amsterdam.
Airberlin (airberlin.com) (Berlin) reported a net profit of €8.6 million ($11.4 million) for the second quarter, reversing a net loss of €38 million ($50.4 million) for the same quarter a year ago.
The company issued this full report:
In a difficult market environment, Airberlin achieved a slightly improved operating result (EBIT) in the second quarter of the year with turnover up by 2,9% to 1,146.4 million euros. Compared to the same quarter of the previous year, Airberlin was able to improve EBIT (Earnings before Interest and Tax) to -6.9 million euros from -8.1 million euros in the previous year. Taking into account other operating income of 4.8 million euros (previous year 39.2 million euros) the annual comparison on operating level shows an improvement of more than 35 million euros. Net profit was with 8.6 million euros, an increase of 46.6 million euros on the previous year (-38.0 million euros).
In particular, Airberlin was able to increase the yield by 3.0% to 120.52 euros (previous year 116.97 euros). Offering increased by 2.9% flights and 3.5% available seat kilometers (ASK). In line with market conditions, load factor was with 82.4%, 1.3% percentage points below that of the same quarter the previous year. However, higher yield revenue per available seat kilometer (RASK) was nearly stable with 7.16 cents (previous year 7.20 cents).
The cost reduction initiatives launched under Turbine last year are on track and are also showing effects in the second quarter. Year on year, airberlin managed to lower the costs per available seat kilometre excluding fuel (CASK) by 2.8% to 5.50 cents (previous year 5.66 cents). Including fuel, CASK fell by 3.7% to 7.24 cents (previous year 7.51 cents). The cost reduction was achieved despite a rise of 8.3% in expenditure for aviation tax, as well as an increase in personnel cost of 13.9% driven by wage increases and one-off costs.
A high level of liquidity
Following a successful recapitalization program, Airberlin has liquid assets in the amount of 600 million euros cash on hand and nearly 300 million undrawn cash facilities available. Compared to year-end 2013, available cash increased by 378 million euros. Following the injection of the subordinated perpetual convertible bonds equity, increased by nearly 130 million euros compared to the end of the first quarter 2014 and stood at -270 million euros at the end of the second quarter. As a reporting date under IFRS, the equity capital has no effect on the financial operation of the company.
Airberlin’s partnerships with Etihad Airways and its network partners and oneworld® have developed very well in the second quarter. The number of passengers on the shared route network with Etihad Airways continued to grow at 7% in the first half year, with approximately 270,000 guests in absolute numbers. Additional routes from Stuttgart, Berlin and Vienna will contribute to future growth. Also the number of passengers on codeshares within the oneworld alliance rose by 7% in the first half year.
First elements of restructuring program announced
When presenting the results for Q2 2014, Airberlin’s CEO Wolfgang Prock-Schauer said: “We were able to improve the net result and our operating result is looking better than it did a year ago, but this is not sufficient. We are determined to restructure Airberlin to ensure the airline moves back to a sustainable profitability within three years. Over the last few months we have been intensively working on the restructuring program. After diligently weighing and validating all of our options in the past months, we decided that airberlin will continue to serve the three core segments, namely Europe, touristic and long haul. We substantially change the way we do business and the way we serve our market. We are able to share some first elements today.”
First elements of the program include:
Focused network:
Airberlin will focus on the largest travel markets in the DACH region (Germany, Austria, Switzerland) as well as Palma de Mallorca and connect these high volume routes with high frequencies in point-to-point traffic. The new network design will lead to a more stable operation throughout the year, reducing the effects of traditional high seasonality. The more focussed network design could equate to a capacity reduction in the region of 10% and will lead to a significantly more efficient operation.
Closer cooperation: closer cooperation with Etihad Airways and its network partners: Airberlin and Etihad Airways are in a process of exploiting synergy potentials in all areas in a win-win-situation for both airlines and other network partners. As a next important step Airberlin is in a process of putting together a framework for a close bilateral cooperation with Alitalia, subject to regulatory approvals.
Narrow body fleet harmonization: In order to achieve a more efficient operation airberlin will strive for narrow body jet fleet harmonization in its entire network.
Streamlining operating platforms: Airberlin is in a process of streamlining and restructuring the operational platforms it uses (AOCs). In line with network adjustments, it intends to reduce its fleet by approximately 10 aircraft. Combined with the new network approach this will enable us to eliminate underperforming elements of our business.
Close down of crew stations: Airberlin has decided and agreed after negotiations to close down five of its smaller crew bases, which will result in higher efficiency and productivity of crew resources. This measure affects the work location of pilots. This does not mean that these airports are not served by Airberlin anymore.
Enhanced commercial capabilities: Airberlin will drive commercial effectiveness with state-of-the-art commercial capabilities by optimizing our overall market approach. This includes a dedicated distribution approach in the segments we serve including our tour operator business.
Copyright Photo: Bjoern Schmitt/AirlinersGallery.com. Airberlin and the official marketing organization for the United States of America, Brand USA, are strengthening their collaboration and jointly unveiled this Airbus A320-214 registered as D-ABNB (man 5246) with this special USA livery at Dusseldorf Airport.
For Airberlin, the USA is a strategically important core market. Airberlin flies nonstop from Germany to five destinations in the USA and this summer has also increased the frequency of five different routes. There is now a daily flight from Berlin (Tegel) to Chicago (O’Hare) and the connection between the German capital and New York (JFK) has been topped up by three flights to make ten weekly connections. From Dusseldorf, Airberlin also offers ten flights a week to the Big Apple, as it did last summer. This summer there are also flights four times a week from Berlin and daily from Dusseldorf to Miami, as well as several times a week from the North Rhine Westphalian capital to Fort Myers and Los Angeles. Recently there were celebrations to mark 20 years of the connection (previously by LTU) between Dusseldorf and Fort Myers: Airberlin is the only airline to serve this destination nonstop from Europe. There are feeder flights to Berlin and Dusseldorf from numerous German and European cities. In the USA, Airberlin also offers its flight guests around 60 additional destinations through the codeshare agreement with oneworld® partner American Airlines.
Etihad Airways (Abu Dhabi) and Alitalia (2nd) (Rome) today announced that they have signed the transaction implementation agreement which will result in a €1,758 million ($2.36 billion) investment to build a reinvigorated Alitalia as a competitive, sustainably profitable business.
The recapitalized Italian national airline will now be able to invest in a comprehensive strategic business plan which will see new long-haul routes from Rome and Milan, a revitalized brand, and a greater focus on Italian tourism and trade promotion. Italian travellers will be able to benefit from a wider choice of destinations while new global connections will boost inbound tourism.
Etihad Airways’ investment of €560 million will be provided through a combination of equity injections, asset purchases and other financing facilities and funding arrangements to re-structure the airline’s balance sheet. This is to be complemented by a further equity investment of €300 million from existing core Alitalia shareholders, including Intesa San Paolo (€88m), Poste Italiane (€75m), UniCredit (€63.5m), Atlantia (€51m), IMMSI (€10m), Pirelli (€10m) and Gavio (€2.5m).
Additionally, up to €598 million in financial restructuring of short and medium term debt has been provided by financial institutions and existing bank shareholders. €300 million of new loan facilities have also been extended by Italian financial institutions.
Etihad Airways will take a 49 per cent shareholding in Alitalia, for an investment of €387.5 million. Its total investment also includes €112.5 million to acquire a 75 per cent interest in Alitalia Loyalty Spa, which operates MilleMiglia, the airline’s frequent flier programme, and the purchase by Etihad Airways of five pairs of slots at London’s Heathrow Airport valued at €60 million. The slot pairs will be leased back to Alitalia on an arm’s length basis. The transaction is due to be completed on 31 December 2014.
Completion of the equity investment remains subject to completion by Alitalia and its key private and public stakeholders of certain conditions precedent and is also subject to final regulatory approvals.
Etihad Airways President and Chief Executive Officer, James Hogan, said: “For Etihad Airways, this is a strategic, long-term commercial investment. On completion, we are committed, with the other shareholders, to build a reinvigorated Alitalia as a competitive, sustainable and profitable business that can operate successfully in the global air travel market.
“We believe in Alitalia. It is great brand with enormous potential. With the right level of capitalization and a strong, strategic business plan, we have confidence the airline can be turned around and repositioned as a premium global airline once again.
“Alitalia is the perfect ambassador for Italy and all that it represents. As we revitalise the brand, the airline will increasingly embody all that we recognise as quintessentially Italian – the history, culture, food and fashion. It must be an airline of which Italians can be proud.
“However ultimately it has to work as a business and the goal is for sustainable profitability from 2017.”
Mr Hogan said he recognized that many steps had been taken by current Alitalia shareholders, management and workers to stabilise the business ahead of new investment.
“Alitalia can succeed and it can grow again but it needs to build from solid foundations. We have made it clear from the start that our entire investment should be focused on supporting the implementation of the new business plan, which will see this goal come to fruition.
“The winners from this successful strategy will be Italian and international travellers, who will see better service, new routes and greater competitive choice; Alitalia’s employees, who can look forward to a brighter future over the long term, in a business which will grow again; and the Italian people, who can be proud once again of their national airline.
“There is a long road ahead, first to complete the transaction and then to deliver this new vision. Today marks a critical step on that journey and we are proud to take our place as a strategic investor in the new Alitalia.”Gabriele Del Torchio, Chief Executive Officer of Alitalia, said: “This is an excellent outcome for Alitalia. We have had to take some tough decisions in a very robust negotiation process but we have achieved the consensus we require to create the right shape and size for Alitalia in the future.
“This investment will provide financial stability and enable us to position Alitalia, and the travel and tourism industry in Italy, for long-term growth.
“And for this important result I’d like to thank all the Alitalia staff – men and women, managers and workers, pilots, crew and office staff – who have worked with passion and commitment for our new launch. The transition to a sustainable and profitable Alitalia has required tough decisions but we all share the conviction that this new beginning, oriented towards growth, will bring new opportunities for everyone.”
The comprehensive business plan provides for the revitalization of Alitalia’s brand, to embody all the things for which Italy is renowned – food, fashion, culture and lifestyle – in a ‘Made in Italy’ premium service concept and guest experience.
This will be accompanied by the implementation of measures to drive increased inbound tourism into Italy and to support the country’s economic growth.
While maintaining the relevance of short-haul routes, the proposed network plan focuses on the profitable growth of long-haul flying from both Rome Fiumicino and Milan Malpensa. This will include flights to new destinations, increased frequency in certain existing markets and an enhanced network to Abu Dhabi to capitalise on growing traffic between Italy and the UAE, and provide Alitalia’s passengers with seamless connectivity to Etihad Airways’ global network.
Starting from Winter 2014, Alitalia will increase frequency between Rome Fiumicino and Abu Dhabi from five per week to a daily service, and commence a new daily service between Milan Malpensa and Abu Dhabi. This flying will complement Etihad Airways’ existing daily services on these markets and open up a range of new connecting opportunities for passengers of both airlines.
From Summer 2015, Alitalia will also begin to implement connections between other Italian cities and Abu Dhabi, with plans for direct flights from markets such as Venice, Catania and Bologna.
Rome Fiumicino will emerge as a larger European intercontinental hub, with up to five new routes over the next four years, while long-haul flights from Milan Malpensa will more than double to 25 flights a week by 2018. Alitalia’s widebody fleet is planned to grow by a third, while its narrowbody fleet will be rightsized to meet the requirements of the new network plan.
Members of the MilleMiglia frequent flier program will be able to ‘earn and burn’ on Etihad Airways and partner airlines, with future integration of the programmes planned.
While network integration and optimization will deliver top-line revenue growth for Alitalia, the cost synergies inherent in the partnership will provide substantial opportunities. These include streamlined hub operations, and joint procurement in the areas of aircraft, engines, maintenance-repair-operations, training, catering, ground-handling and fuel. The partnership will also pave the way for the redesigning and automating processes and working arrangements in line with best practice, and the adoption of leading IT platforms.
To better serve the Italian cargo market, which is the third largest in Europe, Alitalia’s cargo business will be relaunched and expanded, with the establishment of a centre of excellence in Northern Italy, investment in handling capabilities at Italian airports, and the optimization of an integrated cargo network.
James Hogan said: “Italy is a hugely important market for Etihad Airways, from both trade and tourism points of view. The UAE is Italy’s top trading partner in the Middle East and North Africa region, and is home to more than 10,000 Italian citizens and 300 Italian companies.
“The possibilities when we knit together our network with those of our existing equity partners, including airberlin, Air Serbia, Etihad Regional, Jet Airways, Virgin Australia, Air Seychelles and Aer Lingus, and of course our strategic codeshare partner, KLM-Air France, will provide the most compelling customer offering.”
Etihad Airways currently operates daily services from Abu Dhabi to Rome and Milan, which complement Alitalia’s five flights a week from Rome to Abu Dhabi. The two airlines also codeshare to a total of 31 other destinations.
Video: Watch the press conference:
Copyright Photo: Karl Cornil/AirlinersGallery.com. Alitalia is very likely to receive a brand overhaul including a new aircraft livery. Airbus A330-202 EI-EJO (msn 1327) arrives back at the Rome (Fiumicino) hub painted in the updated 2006 livery.
Alitalia (2nd) (Rome) starting on October 26 is resuming Rome-Marseille service, after 16 years with Airbus A319 aircraft. The route is being restored after a 16-year absence per Airline Route. Alitalia last operated this route in October 1998 with ATR 72s.
Here is summary of new routes this summer:
In the summer season Alitalia’s network grew with four new direct connections:
From Venice to Tokyo
From Rome Fiumicino to Comiso and Skopje, Capital of Macedonia.
From Milan Linate to Warsaw and Prague
From Alghero to Turin
Seasonal flights:
Seasonal flights will operate from Rome to Thessaloniki. Seasonal flights from Rome Fiumicino Airport to Los Angeles and Chicago will began in May.
June to September:
from Rome and Milan Linate to Lampedusa and Pantelleria;
from Rome to Ibiza, Palma de Mallorca and Rhodes.
July to September service will resume from Naples to Olbia.
New summer routes will operate in August:
from Milan Malpensa to Ibiza and Rhodes;
from Milan Linate to Athens, Thessaloniki, Heraklion and Copenhagen (the last starting from June);
from Rome to Menorca, to Mykonos and Heraklion.
Copyright Photo: Karl Cornil/AirlinersGallery.com. Airbus A319-112 EI-IMI (msn 1745) in the special Discover Friuli Venezia Guilia livery arrives at the Rome (Fiumicino) hub.
Jet Airways (Mumbai) and Alitalia (2nd) (Rome) have announced the expansion of their code share partnership offering guests enhanced network connectivity between India and Italy and beyond to several Indian and Italian cities of touristic and business importance.
The new code share flights went on sale from July 1, 2014, for travel starting today (July 5, 2014).
Under the expanded code share agreement, Jet Airways will place its marketing code on the Alitalia operated flights between Abu Dhabi and Rome and beyond to Bologna, Florence, Naples, Turin, Venice and Verona in Italy.
Similarly, Alitalia will place its code on Jet Airways flights operated between Abu Dhabi and Delhi, Mumbai and Kochi. Alitalia will also place its code on Jet Airways’ flights beyond Mumbai and Delhi to Amritsar, Bengaluru, Chennai, Kolkata and Udaipur.
Copyright Photo: TMK Photography/AirlinersGallery.com. Boeing 777-35R ER VT-JEK (msn 35165) of Jet Airways departs from Toronto (Pearson).
Alitalia and Etihad Airways today (June 25) confirmed that they have agreed the principal terms and conditions of a proposed transaction whereby Etihad Airways will acquire a 49 percent equity stake in Alitalia.
The airlines will now move to finalize the transactional documents, that will include the agreed upon conditions, as soon as possible. The conclusion of the investment is subject to final regulatory approvals.
Alitalia will become the latest equity partner airline for Etihad Airways. Are there more partnerships coming, especially in Europe?
Copyright Photo: TMK Photography/AirlinersGallery.com. Alitalia’s Airbus A330-202 EI-EJG (msn 1123) in the special promotional Calabria livery prepares to touch down in Toronto (Pearson).
Alitalia’s (2nd) (Rome) CEO stated upwards of 2,200 jobs could be cut as a result of a planned alliance with Etihad Airways (Abu Dhabi) as reported today by the La Repubblica newspaper and this report by Reuters. The report also states Etihad Airways is not flexible on this amount of job cuts.
Copyright Photo: TMK Photography/AirlinersGallery.com. A lingering question is Alitalia’s role in the SkyTeam alliance when Etihad Airways makes its investment in the flag carrier. Will it leave the alliance? Airbus A330-202 EI-DIR (msn 272) in the SkyTeam motif arrives at Toronto (Pearson).
Etihad Airways (Abu Dhabi) yesterday (June 1) confirmed that it will forward a letter detailing the conditions precedent and the criteria for a proposed equity investment by Etihad Airways that have been negotiated with Alitalia (2nd) (Rome) and its stakeholders over the past months.
The Italian Government appreciates the strategic importance of this transaction and looks favorably at the Etihad Airways – Alitalia partnership.
Upon confirmation by the Board of Alitalia and its stakeholders of their acceptance of these terms, the airlines will proceed to final documentation in order to complete the proposed transaction, in line with EU and other regulatory requirements.
President and Chief Executive Officer of Etihad Airways, James Hogan, said: “We are delighted to be able to move forward with this process and look forward to the successful conclusion of the proposed transaction with Alitalia.
“An equity investment in Alitalia will be beneficial not only for the both airlines, but, more importantly, it will give more choice and broader travel opportunities to business and leisure travellers into and out of Italy.”
Gabriele Del Torchio, Chief Executive Officer of Alitalia, said: “This is an excellent outcome for Alitalia. This investment will provide financial stability and confirms Alitalia’s key strategic role as an infrastructure player in the travel and tourism industry in Italy for long-term growth.”
Roberto Colaninno, President of Alitalia, said: “We are delighted to move forward with Etihad Airways providing Alitalia with an ideal strategic partner enhancing the Company’s long term growth perspectives.”
In other news, also on June 1, Etihad Airways’ Flight EY 073 was met with the customary water cannon welcome as it touched down on schedule at Zürich Airport, marking the start of the airline’s new daily nonstop service between Zürich and Abu Dhabi.
The new Etihad Airways service builds upon the airline’s existing daily flights between Abu Dhabi and Geneva launched on June 5, 2004, bringing to 14 the number of flights linking Zürich and Geneva to Abu Dhabi, the capital of the United Arab Emirates, each week.
The new Zürich – Abu Dhabi route is served by an Airbus A330-300 aircraft configured with 8 seats in First Class, 32 in Business Class and 191 in Economy Class.
Copyright Photo: Paul Denton/AirlinersGallery.com. Airbus A330-343X A6-AFA (msn 1071) in the special “Visit Abu Dhabi” c odor scheme is pictured arriving on a regular flight in Geneva.
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