Italy

Acquisition of Blue Panorama and Wind Jet ensures Alitalia will keep ahead of Ryanair in Italy

Alitalia is poised to bolster its position in its home market through the planned acquisition of smaller Italian carriers Wind Jet and Blue Panorama. If the recently announced deals are completed, Alitalia stands to increase its total market share to about 27%, cementing its position as Italy’s leading passenger carrier.

The acquisitions will also result in increased low-cost competition in Italy as Alitalia expands its presence in the budget sector through the new subsidiary companies.

Alitalia stated there are potential synergies with Blue Panorama and Wind Jet, with the airlines having complementary networks, markets and products. Alitalia will be submitting its plan to Italy’s Antitrust Authority for approval prior to the acquisitions being presented to the governing bodies of the three airlines.

Europe loses four airlines in an unhappy start to 2012

As the economic noose tightens around European airlines, the industry's ranks look set to thin this year. Over late 2011 and the first month of 2012, the industry has witnessed the collapse of four small European carriers as well as the announcement of a merger between Wind Jet and Blue Panorama Airlines by Alitalia. For the time being, it is predominantly smaller, lower capitalised airlines that have failed. The four failed carriers deploy only around 217,000 weekly seats or 0.6% of total European system capacity.

However, the collapses, which follow more than 30 European airline failures over the 2008/09 economic crisis, could in the coming months foreshadow the demise of further carriers or further consolidation, with a number of financially weak carriers operating in the European market. While all but one of the airlines affected so far in 2012 have been based in Continental Europe, there are several weak carriers in Eastern Europe urgently seeking further funding and/or new investors in the near term. Three of the collapsed carriers have been privately owned, but last week's collapse of Spanair shows governments may be willing to let state-supported carriers dither away.

MAS will achieve its targeted 12% capacity reduction by February, to the delight of Gulf carriers

Gulf carriers and AirAsia will likely emerge as the main beneficiaries of the network restructuring at Malaysia Airlines (MAS). The Malaysian flag carrier has selected several routes to discontinue by early next month, resulting in a 12% reduction in system-wide capacity as it begins implementing its new business plan.

Middle Eastern LCCs driving growth into Eastern Europe, Russia and CIS

Russia, the CIS nations and Central and Eastern Europe have been receiving a great deal of attention from Middle East-based carriers in recent months. Full service and low-cost carriers have announced or added a flurry of routes into Eastern European destinations over the past few weeks. Airlines in the Middle East are looking to tap into the underserved region, which is still showing strong economic growth despite troubles in several European markets and strong growth in business and tourism traffic.

Homegrown LCCs Air Arabia and flydubai are leading a push into the regions, but so too is Qatar Airways. Additionally, Oman Air plans to launch services to Moscow. While Middle Eastern carriers have long dominated traffic into western Europe, they now comprise the majority of traffic between the Middle East and central Europe, eastern Europe, Russia and CIS.