Ryanair CEO describes ITA Airways as a ‘huge political problem’
LONDON – Ryanair CEO Michael O’Leary today said 12-month-old ITA Airlines is a business that is set to continue losing market share and will require further borrowing from the Italian government.
ITA came into being when its predecessor Alitalia went bankrupt amid a dire financial situation that ultimately brought Italy’s national flag carrier to an end.
After 74 years of operation, Alitalia has finally closed its doors permanently after existing problems were compounded by the Covid-19 pandemic and proved to be the final nail in its coffin.
As a business, it cost the government almost €13 billion in the 20 years before its demise.
ITA is currently fully state-owned but has been in talks with a US consortium led by investment fund Certares since August about a possible stake.
According to Reuters, for a 50% stake plus one share, the fund supported by Air France-KLM and Delta Airlines would be ready to pay 350 million euros.
O’Leary said this today at a press conference in Rome, according to RTE: “We are Italy’s standard bearer, so we hope the new government will recognize that and work with us because we want to grow.”
“It cannot compete with Ryanair in Italy and on short-haul routes,” O’Leary continued, adding that Ryanair has a 40% market share in Italy and is heading towards 42-43%.
That’s considerably more than any of its closest rivals, with EasyJet having 11%, Wizzair and two other low-cost carriers all having a 10% share. While the apparent Italian national carrier, ITA, only has a 9% market share.
Ryanair is Europe’s largest airline, and Michael O’Leary said he expects to see its Italian market share grow by more than 50% over the next three years.
Reasons expected to support this increase in share would be the taking of business from some rivals and an overall increase in air travel.
Currently, Ryanair has a network of 52 flights to Italy, but as winter approaches, they are looking to increase that number from 18, up to 70.
In addition to a commitment from O’Leary to inject 1.3 billion euros into the Italian capital’s two airports – Fiumicino and Ciampino, the latter being mainly used by low-cost airlines.
Having just undergone governmental elections, the new Italian government is not yet in place. With Georgia, Meloni claimed victory and was to become the country’s first female prime minister.
When everything is in place at the end of October, Michael O’Leary is eager to meet the new team responsible for leading the country.
On his agenda, there will be less taxes and less restrictions; both are integral areas that could support the growth of the Italian tourism sector over the next 4 years.
“We think tourism will be one of the real growth sectors in Italy for the next three or four years if the government does sensible things like scrapping the municipal (airport) tax and lifting restrictions on Ciampino “, did he declare.
The 9.4 million passengers Ryanair hopes to fly to Rome by 2023 will be a percentage of the 56 million passengers Europe’s biggest low-cost airlines hope to carry in total by the end of the year next.