The US is concerned about Air Italy and its 49% shareholder, Qatar Airways.  It is thought that this stake allows Qatar to increase its access to the US market.  US airlines don’t like competing with state-funded airlines.   There are many examples of well funded state-owned airlines that attract no attention. But three Gulf carriers (Etihad, Emirates and especially Qatar) attract extraordinary attention.

Since the US noted that it is scrutinizing the Qatar Airways investment in Air Italy on April 10, there have been some service shrinks by the Italian airline.   On April 24 the airline cut three seasonal services over the Atlantic.  The following data model illustrates the relative size of Air Italy in the US-Italy market.  Based on this, it is a stretch to consider Air Italy a threat based on its market footprint.

In the model, besides clicking the play button to watch the traffic growth over time,  we recommend you click each airline’s ball.  This will show the relative flow over time for that airline in this market. It also demonstrates that Air Italy is tiny compared to the competition. The airline has five A330s – and even if it increased this by two per year, it cannot match the US airlines for capacity potential.

If the threat is not from the size of the airline, what else might be going on?  There is clearly a close relationship between Air Italy and its major shareholder. After all, Air Italy leases aircraft from Qatar Airways.  Perhaps the threat is more about the product.  The big three Gulf airlines are well known for their focus on cabin product.  It appears Qatar Airways has influenced Air Italy in this regard – and that is great for customers.  After all, Air Italy business class passengers get the Qatar Airways cabin which comes with a full turn-down service, mattress, duvet, pillows, pajamas, and slippers. Of course, there are also amenity kits and inflight WiFi.  For the same fare, premium passengers might not be “mileage status” driven and try Air Italy. These customers might like what they experience.

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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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