Airwars in Italy Reborn Alitalia Faces German Competition at Home

As Italy relaunches national carrier Alitalia, Germany's Lufthansa prepares the introduction of a budget airline that will serve Milan's Malpensa airport, Italy's second biggest.

Following the collapse of its effort to buy part of European competitor Alitalia, Germany's Lufthansa is now moving in to seek a share of the lucrative Italian air travel market on its own. The company recently announced the launch of Lufthansa Italia, an Italian subsidiary that will provide budget flights from Italy's second most important airport, Milan's Malpensa.

Lufthansa Italia will fly from Milan's Malpensa Airport.

Lufthansa Italia will fly from Milan's Malpensa Airport.

Starting Feb. 2, the budget carrier will offer flights for cost-conscious business travellers and vacationers to Paris and Barcelona for as little as €100 ($132.52) rountrip, taxes included. By the end of March, the airline also plans to add additional routes to locations including London, Madrid and Brussels.

Competition on these routes is stiff. Budget carriers already offer a number of these routes from Malpensa at extremely attractive rates, with morning and afternoon flights. Because Lufthansa's usual partner in Italy, Air One, is now part of Alitalia -- which began operating under new ownership on Tuesday -- the Germans believe there's a good chance Lufthansa will obtain flight rights on the lucrative route between Milan and Rome for the first time. Until now, the lucrative route has been largely reserved for Alitalia and Air One, but after their merger there is significant probability that the European Commission will require that the route be opened up to other competitors.

After the government in Rome agreed to massively cut staff at the bankrupt airline and for the state to assume most of its debt, an agreement was made to unload Alitalia on CAI, a group with 25 private Italian investors, for just over a billion euro. Alitalia had declared bankruptcy in August.

The company, though, will face competition from market newcomer Lufthansa Italia as well as budget carriers like Ryanair and Easyjet, which have in recent years increased their presence in Italy.

dsl -- with wire reports


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