Air Italy was founded in early 2018 and was established to rival then-incumbent Italian flag carrier, Alitalia (now reborn as ITA Airways). However, the airline suspended its operations just before the COVID pandemic broke out and liquidated its assets, becoming yet another failed carrier in the competitive airline business. With such high hopes for the Qatar Airways-backed carrier, what happened to Air Italy, and how did it fall?
Significant investment by Qatar Airways
Air Italy, as a name, started as a charter airline in 2005 and was then acquired in 2013 by the larger Italian carrier Meridiana. Meridiana, however, was founded back in the early 1960s, and it’s been through a couple of major rebrands since then. It started as Alisarda in 1963, serving several destinations in Italy and further afield in Europe from its base at Obia on the island of Sardinia.
Then, in 1991, a merger brought Alisarda together with Spanish airline Universair. Both airlines were rebranded together as Meridiana – which then acquired the small charter airline Air Italy.
In September 2017, Qatar Airways announced that it would be buying 49% of AQA Holding – the parent company of Meridiana. Shortly after that, it was announced that Qatar Airways would merge Air Italy with the current Meridiana subsidiary under the Meridiana AOC. Just a few months later, in February 2018, the Meridiana name vanished, and Air Italy emerged with a new brand and new strategy.
Expansions and partnerships
2019 was a year of significant growth and development for Air Italy, which aggressively went after the competition with the signing of various agreements with other major airlines.
Photo: Air Italy
This included a codeshare agreement with Qatar Airways for services between Doha and Rome Fiumicino, as well as Pisa, Venice, Singapore, and the Maldives. Qatar Airways flights shared with Air Italy included those between Milan and Fiumicino, Naples, Olbia, and Lamezia.
“The commencement of our partnership with Qatar Airways is good news for passengers of both airlines. Our passengers can now benefit from a new choice for visiting Doha or to reach, via Doha, the white sandy beaches of Maldives and one of the most modern and busy Asian city, such as Singapore.” -Marco Rigotti, Air Italy Deputy Executive Chairman via Airways
In August 2019, a partnership was announced with Finnish carrier Finnair and Israeli airline El Al, helping Air Italy to gain a foothold in the international market. The Italian airline would also launch long-haul services to the likes of Bangkok, Mumbai and Toronto.
Fleet expansion ambitions
At this time, the airline had a fleet of 12 aircraft: four Airbus A330s and eight Boeing 737s. This number of 737s was realistically only five, however, as three of these were the grounded Boeing 737 MAX. Air Italy had been expecting more of the aircraft when it ceased operations. Its four Airbus A330s had come from Qatar Airways and were primarily flying long-haul to North America.
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Where Did Air Italy’s Boeing 737 MAX Aircraft End Up?
Ordered by Qatar Airways for operations by Air Italy, the MAX jets weren’t with the Italian airline for long before it had to shut down its business.
Its growth plans even included looking for a US carrier to partner with. Of course, it would not be successful with this search, as the conflict between itself and US carriers was a defining aspect of its short-lived time as an airline.
Enemies across the ocean
The big US airlines were never fans of Air Italy. With 49% owned by Qatar Airways, American carriers considered it an extension of the Middle Eastern airline. US carriers have firmly been against the way Middle Eastern carriers have operated, claiming that the three airlines (Qatar, Etihad, Emirates) have had an unfair advantage through tens of billions of dollars worth of government subsidies.
Photo: Andrew Mauro | Shutterstock
Air Italy strenuously denied the allegations, saying at the time,
“As of [May 2019] we have a fleet of 13 aircraft, five of which are capable of operating long-haul service. While we pride ourselves on our flair and world-class service, we are puzzled (but slightly flattered) that the three very largest US carriers – which between themselves operate a fleet of more 2,500 aircraft – claim to be threatened by us.”
The fall of Air Italy
It was in early February 2020 that Air Italy announced that it would suspend operations. Then, at a shareholder meeting on February 11th, it was decided that the airline would be liquidated. Qatar Airways issued a statement regarding Air Italy’s insolvency proceedings, saying that it “was ready once again to play its part in supporting the growth of the airline.” However, this would “only have been possible with the commitment of all shareholders.”
There were a few factors that led to Air Italy’s downfall. One early issue was the grounding of the Boeing 737 MAX and the inability of the new carrier to operate three MAX 8 jets of which it had already taken possession. With the jets grounded, Air Italy was forced to lease three replacement planes.
Additionally, Air Italy was operating in a highly competitive marketplace. While flag carrier Alitalia may not have been the fiercest of rivals, Air Italy would have to go up against low-cost carriers like Ryanair and easyJet in the short-haul marketplace. On the long-haul side, the airline would also have to compete with its US rivals – even with a good business model in place, it was a tough ask for any airline.
Finally, the straw breaking the proverbial camel’s back was the growing global COVID pandemic crisis, which emerged in February and March 2020. Significant travel restrictions and plummeting demand killed any remaining optimism that shareholders may have had in keeping the airline going.