Alitalia reducing its presence in the Milan market is viewed by German carrier Lufthansa as one of the best opportunities to further gain its market shares in Europe.

“Milan is a strategic market: the population in the area reaches over 10 million and the city is one of the wealthiest in Italy as it is the financial and business capital of the country,” explained Heike Birlenbach, head of the newly formed Lufthansa Italia. Lufthansa so far carries some 5 million passengers a year from and to Italy, one of its largest markets in Europe after Germany.

Big money from business gives to the Lombardy region –with Milan as its capital- a powerful tool to influence economic decisions. With Italy’s embattled national carrier Alitalia consolidating its core activities in Rome, Milanese people felt increasingly frustrated.

According to Birlenbach, Alitalia then gave its entire support to Lufthansa to move into the market. “There is an enormous potential for point-to-point destinations out of Milan, especially as Milanese are very reluctant to transit today via Rome or Paris to reach the rest of the world,” she added.

Lufthansa group new Italian subsidiary, Lufthansa Italia offers non- stop flights to eight European destinations and three domestic cities (Bari, Naples and Rome), offering 180 frequencies per week with some 35,000 seats on Airbus A319.

“We are very pleased with the first results. As we focus very much on business travelers needs with a reliable high quality product and a good punctuality, we have already been able to achieve an average seat load factor of 60 percent,” Heike Birlenbach said.

A sensitive point was how to sell a “German” airline to an Italian audience, which has a reputation for being rather fussy, if not nationalistic. Birlenbach said: “We got a very positive feedback from our Milan passengers. We are of course a Lufthansa subsidiary, however with an Italian flair. We have specific uniforms designed by an Italian company, added a logo with Italian colors. We also serve typical Italian dishes as we recognize that Italian passengers’ tastes are different. We are for example the only airline serving real espresso on short haul flights.”

So far, Lufthansa Italia flies with German-based staff as well as aircraft registered in Germany. According to Birlenbach, the airline is in the process to get an Air Operation Certificate (AOC) to register in Milan. “We would then have aircraft based in Milan and would hire some 200 staff at Malpensa,” she said.

The move is, of course, supported by Lombardy regional government, which sees Lufthansa Italia as the unofficial new home carrier for the region. And Lombardy has ambitions to see further development.

The region is already asking Lufthansa to boost up frequencies and routes. For Heike Birlenbach, expansion will come according to the pace of development in passengers traffic. “ We are on target,” she said.

Lufthansa Italia has currently 9 aircraft –including one operated on a wet lease basis by Bmi in the UK-. The fleet could include 12 aircraft in the near future.

“We are also looking to regional partners to serve smaller markets as we expereicne a surge in transit passengers,” added Birlenbach.

Transfer passengers represent 15 percent to 20 percent of total traffic. More domestic flights could soon be added to Southern Italy. In the longer term, Lufthansa Italia could even fly long-haul. “We have already been solicited by Lombardy. They are no plans for the time being but this is certainly an option we are considering,” said the head of Lufthansa Italia.