Italy tourism

Tourism in Italy is booming, but its airlines can barely stay afloat

If you’ve ever tried to sneak past the crowds to toss a coin into the Trevi Fountain or attempted to stroll along the canals of Venice among its crowds of tourists, you know that Italy is a hugely popular holiday destination. .

The country hosted a record 420 million overnight stays by foreign visitors in 2017, the most recent year for which tourism data is available. This figure represents an overall increase of 4.4% over the number of the previous year.

Yet during this veritable tourism boom, the country’s airlines have struggled to stay afloat. The country’s newest company, Air Italy, which was launched just two years ago, announced on February 11 that it would be liquidated under increasing financial pressure and its last flights would take place on February 25. Customers booked after this date will be fully refunded.

Air Italy was launched in 2018, after Qatar Airways bought a 49% stake in decades-old Italian airline Meridiana, which it revamped with a new name and business model. Based in Milan, Air Italy focused on regional flights between Italian cities, as well as long-haul destinations like Miami, New York and Toronto, and Natal, Brazil.

Air Italy cabin crew in front of a Boeing 737 Max

Marco Tacca Pier

Even with its headquarters in such a popular travel destination, Air Italy simply couldn’t find its place in the saturated Italian market. “It’s a popular market for airlines around the world, including low-cost and short-haul airlines in Europe like Ryanair and EasyJet, which are doing well and are much more efficient airlines,” explains the aviation expert Seth Kaplan.

Air Italy started losing money from the start, posting a loss of 164 million euros after its first year of operation, and even higher losses for 2019, estimated at around 200 million euros. The losses can also be partly attributed to bad luck, such as the grounding of the Boeing 737 Max plane, of which Air Italy owned 20 and had to spend more resources replacing it with leased planes. But there is no doubt that Air Italy mismanaged its long-haul route choices, some of which were canceled soon after launch, such as Milan to Thailand and India. Other flights, like Milan to Chicago, were pulled from schedules before they even started.