The aviation market between the U.S. and Italy is filled with subsidized Middle East carriers and troubled EU carriers. But U.S. airlines keep trying.
A street vendor sells his hats to tourists in front of the Colosseum in Rome in July 2019. United Airlines said Thursday it will begin Newark-Palermo service in May 2020, adding its fifth destination in a tough U.S.-Italy aviation market where competition is dominated by subsidized Mideast carriers and financially troubled European carriers.
Etihad spent $500 million on a 49% stake in Alitalia, then spent $150 million more to buy Alitalia’s loyalty program. The entire investment was wiped out by Alitalia’s 2018 bankruptcy. “While the back of the aircraft is always filled, especially in summer, the front cabins aren't generating enough to make the routes strong,” Brancatelli said. “Too many tourists and not enough business travelers don’t make for profit in any country.”Figures compiled by aviation consulting firm AirInsight show that between 2012 and 2018, Emirates boosted its market share to 8% from zero. Meanwhile, U.S.
To the three global U.S. carriers, the market is manipulated by Middle East carriers who want to dump capacity. While the 2018 agreement between the Trump administration and the governments of Qatar and the UAE froze the number of fifth freedom flights by Gulf carriers. Carter said Qatar’s involvement with Air Italy represents “a workaround.”
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