Another airline shuts down: Air Italy closes operations

The investors behind Air Italy, Qatar Airways and the Aga Khan, have announced the end of the airline, a two-year venture that was launched with much fanfare, colorful rebranding, and high hopes, but was unable to overcome the harsh realities of a complex market.

Air Italy has grounded all flights. It was 51 per cent owned by the Aga Khan through his Alisarda company, with the remaining 49 per cent held by Qatar Airways.

The collapse is far gentler than last year’s failures. Wow Air, Adria Airways and Thomas Cook all shut down immediately they went into liquidation.

But until 25 February 2020, Air Italy’s planned flights “will be operated by other carriers at the times and on the days previously scheduled”, according to a statement on the airline’s website.

After that date, passengers will either be “re-protected” (booked on other airlines) or get all their money back.

Air Italy, part of which was previously known as Meridiana, was a leisure carrier operating a mix of long- and short-haul flights.

Even by the undemanding standards of Italian aviation, Air Italy was astonishingly unprofitable. In 2018, its average fare was around €142, but it made a loss of €82 for every passenger it flew.

Its operations were hampered by the grounding of the Boeing 737 Max following two fatal crashes; it had three of the jets in its fleet.

The closure has taken place amid considerable acrimony, with Qatar Airways indicating that it was happy to continue to bankroll the losses in the hope that Air Italy would eventually become profitable.

The Doha-based airline said: “Since the acquisition on 28 September 2017 of a minority stake in Air Italy, Qatar Airways has strongly believed in the company and in its potential, supporting management’s proposed business plan with a view to improving Air Italy’s growth and job creation, with the addition of long-haul routes and numerous in-flight service improvements, in line with Qatar Airways’ globally renowned high standards.”

As a non-EU entity, Qatar Airways is not allowed to take a majority stake in a European Union carrier.

Qatar Airways’ Gulf rival, Etihad of Abu Dhabi, made a disastrous investment in the Italian national airline, Alitalia – losing around $2bn before walking away after employees rejected a restructuring plan.