“Italy is a tough market, ETA needs a lot of money” – Corriere.it

Doha – Air France-KLM, one of the largest groups in Europe, is directly following the privatization of ETA Airways. But when it comes to investing money, the French-Dutch do not hide their bewilderment and prefer to limit themselves to commercial cooperation with their financial partner Certares, an American fund that sent a binding bid to seize the majority of ETA. This was pointed out by Ben Smith, CEO of Air France-KLM, during a conversation with Corriere della Sera On the sidelines of the annual meeting of Iata, the main association of airlines.

What is happening on the ETA front?
“We love your country, but we had two previous investment experiences in Italy that were ‘complicated’. But since you are such a big market to us, there are ongoing insights with Delta and our financial partner (Certares, so) to try to understand what can be done.”

But you haven’t yet seen the idea of ​​investing in ETA…
In the meantime, there is a ban on us in the European Commission to make investments. We are now in a better financial position, even compared to last month. This is the most important thing for the Air France-KLM group which also saw the entry of a new partner, Cma-Cgm. The next step is to be able to repay at least 75% of public loans in order to make investments.”

So at the end of the year, when you’re free from the European ban on takeovers, can you invest in some airlines?
“It seems to me a reasonable scenario, but that’s in general, and not in relation to ETA.”

But by the end of the year, the Italian government may have already signed the agreement with the consortium it sees best.
“The deadlines for the sale of ETA are set by your government.”

Aren’t you afraid that the Eta in the hands of MSC-Lufthansa will take the passengers away from you, especially businessmen from northern Italy?
“I must say that we have a good market share in Italy. We also have additional slots at Milan Linate Airport which is very important to us. Many Italian passengers travel through our hubs in Paris and Amsterdam to North and South America. Lufthansa is a strong competitor across Europe. Italy is an interesting market, but it is not easy to provide its services.”

what does it mean?
«Well, in Milan there are two airports – Malpensa and Linate -, in Rome, the flows flow mainly inland and there is a pronounced seasonality. The fact is that making money in Italy in January, February and March is really difficult. This should be taken into account when looking at Ita Airways since it is based in Rome. One thing we don’t have for example in Paris where there is no seasonality. In short, things are not exactly simple.”

What do you mean by this?
“When we look at the Italian market and the opportunities we need to have a plan that really allows us to take profits. That is why the Italian market is really unique ».

Let me understand: if it were up to you, would it be better to move the hub to Milan where demand is less seasonally than Rome?
Well, in short, there are still two airports in Milan. It’s complicated to manage there, too. I come from Canada where there is a similar situation: Montreal airport is somewhat similar to Malpensa, but the big market is in Toronto and it is not easy to compete better with American competitors. There is a similar situation in Italy: an important but highly seasonal market, with three related airports.

So, in your opinion, is this not the best position for ETA?
“Not at all. It is a dynamic that becomes a huge challenge for ETA. And if we look at the Italian company’s market share in intercontinental flights, we see how much resources are needed to invest in order to allow it to increase its specific weight ».

So I asked him: Are you interested in Ita and if you could do that, would you put money into the Italian company?
“Let’s say it’s definitely too early to support this thing.”

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