Alitalia vs Frecciarossa on Rome-Milan route
Alitalia irked by decision on Rome-Milan route
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(eTN) - Alitalia feels economically hurt by the railway competition on the very lucrative Rome-Milan route and does not agree with the authorities’ decision that the high-speed rail service would not be a serious competition to the air carrier. The airline said that it will appeal the decision.
According to Alitalia, it has lost 2 million passengers and about 50% of the revenues in the last three years due to a competition from the Frecciarossa high-speed train that has achieved a market share of 56% of Rome-Milan route.
Since the service was launched on December 13, 2008, Frecciarossa has in fact earned, on the route in question, 19 points of market share to reach 56% of passengers carried, compared to 32% of the aircraft (Fiumicino-Milan Linate Airport) and 12% of the travel by car on the same route.
The competition of high-speed train forced Alitalia, to invest 30 million euros in Rome – Milan operation - in airports, in-flight service and the renewal of the fleet - up to quality standards to be considered of excellence.
At the same time, the high-speed rail has been a great commercial and financial success to the point that the seat capacity offered on the Rome - Milan route is already four times higher than that of the airlines and is expected to increase further in offering frequencies and schedules with the new service of NTV Italo train.
These facts show the absence of Alitalia’s monopoly in transportation between the two cities, more so considering that flights between Milan and Rome are also offered by other carriers on routes Fiumicino - Malpensa Airport, Ciampino Airport and Orio al Serio (the Bergamo airport 30 miles from Milan), serving the same general areas.
In light of this situation, and while fully respecting the work of the Authority, Alitalia will appeal the decision with the relevant institutions.
"I'm surprised at the Authority's decision - said Andrea Ragnetti, CEO of Alitalia - which is based on an absolutely unacceptable assumption. The fact that the high speed train is a direct competitor of the plane on the Rome - Milan route is known to all Italians. The competition of the train was one of the main factors that led us to invest tens of millions in the improvement of our fleet, our services, and at the airports of Fiumicino and Linate. Although our prices have fallen by almost 20%, Alitalia has lost in three years about 40% and 50% of passenger revenues. None of this belongs to a monopoly position. "