A daily bulletin of news & opinion

13 August 2014

So it happened. A major Middle Eastern airline now owns a big stake in a legacy European carrier. And for some airline executives in the US and the EU that means that yes, the sky is beginning to fall.

We can glean a lot from the 49 per cent stake (the maximum allowed under EU law) that Abu Dhabi-based Etihad now has in Italian carrier Alitalia. We know that Middle Eastern money has wrapped itself around something many considered holy in terms of Italy’s national brand. We also know that the move by Etihad chief James Hogan is a solid knock on Europe’s creaky aviation door.

Fresh and nimble low-cost carriers have crippled the continent’s once-strong legacy airlines. Alliance systems are in jeopardy as the majors try to figure out how to cope with the likes of Etihad buying up parts of their networks. The Air France-KLM group had a chance to bail Alitalia out but it didn’t want to put up the cash and was impatient with the airline’s creditors. Surely it didn’t want the competition swooping in – but maybe it didn’t think anyone would really want Alitalia in the end. The floundering flag carrier is saddled with debt and labour unions weren’t too keen on restructuring. After months of negotiations the unions are said to be okay with last Friday’s deal and the forthcoming cost cuts.

Austerity and the €1.76bn financial details aside, Hogan didn’t keep mum about his vision for Alitalia. He offered strong statements about his belief in the airline and even went so far as to say, “the sexiest airline in Europe should be Alitalia.”

But Alitalia is far from sexy. When I speak to Italians about the carrier many say they won’t even fly with it. That’s not a great place to be starting from in a country that’s usually pretty proud of the things it produces. Sure, it’s fun to think about Alitalia as the sexy airline that it once was and could again be. But any progress back toward the glamour brand of a bygone era will have to be made with extreme consideration.

The fates of the Middle Eastern carriers have been sealed. They are, for the most part, managed by westerners who embrace contrived notions of luxury and brand identity. They all feel slightly English – with a dash of dates and palm trees.

Italy is a wonderful, sexy and beautiful place and its flag-bearing airline could truly be a soft-power piece through which these things are articulated. Let’s just hope that Hogan’s idea of sexy doesn’t put Alitalia in a room with the wrong bedfellows.

Tristan McAllister is Monocle’s transport editor.


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