Qatar Airways Italian endeavor causes US airline industry panic
When Air Italy, the country’s second largest airline, announced early in December 2018, its plans to launch flights to Los Angeles and San Francisco, U.S. legacy carriers responded in outrage. What they see behind the small Italian carrier, formerly known as Meridiana, is the guiding hand of Qatar Airways, Air Italy’s current co-owner. Although Qatar has been investing into a range of foreign airlines for years now (most recently − China Southern), its involvement in Air Italy’s activities struck a chord within U.S. industry giants reaching as far as the chambers of the U.S. Senate.
The Italian carrier’s aggressive expansion has raised concerns that the Qatari government had violated its Open Skies agreement with the U.S. through its Air Italy investment.
On December 5, 2018, Air Italy announced it would double its destinations across the U.S. from two to four, adding Los Angeles and San Francisco on the West Coast of the U.S. on April 3 and April 10 of 2019, respectively.
The new routes were an addition to the five intercontinental destinations it had already began serving in the second half of 2018 from its main hub at Milan Malpensa Airport (MXP), including Bangkok (Thailand), Delhi and Mumbai (India), as well as New York and Miami.
Less than two weeks later, on December 17, 2018, Air Italy announced direct flights to Toronto (Canada), followed by plans to launch new service to Chicago (U.S.) revealed the next day; direct flights on these routes are scheduled to start on May 6 and May 13, 2019, respectively.
According to Air Italy’s official press release announcing the Chicago route, “the new service is part of Air Italy’s rapid network expansion out of its Milan Malpensa hub [...] alongside its ambitious growth plan for the next three years”. Those ambitions have been made clear from the very beginning.
Air Italy's entry into this [U.S.] crowded market appears consistent with Qatar Airways pattern on adding subsidized capacity in markets where demand is already well served, - Letter to the U.S. government
Air Italy surfaced when, in February 2018, the Italian airline Meridiana merged with its subsidiary, the old Air Italy, taking up its brand. Having acquired a 49% stake in Air Italy the previous year, Qatar Airways became the carrier’s second biggest shareholder. Under its new owners, the airline stated it would seek to grow its fleet and passenger numbers fourfold by 2022, having a goal to replace Alitalia as the country’s new national carrier.
But with Air Italy’s expansion plans, the U.S. big three – American Airlines, United and Delta – claim to see a bigger picture. They see Qatar Airways’ aggressive strategy of expansion into the U.S. market, out of Air Italy’s newly established hub and enabled by new aircraft purchases. Otherwise, why (and how) would a small, loss-making and relatively unknown European carrier undertake such plans?
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