Alitalia to end its Air France-KLM partnership

Alitalia (Societa Aerea Italiana) (3rd) (Rome) has a new growing relationship with partner Etihad Airways (Abu Dhabi). This expanding partnership with the Gulf carrier has made the older Air France-KLM (Air France and KLM Royal Dutch Airlines) (Paris and Amsterdam) relationship less important. As a result, Alitalia has decided to withdraw from the Air France-KLM partnership at the end of 2016. Will it also leave SkyTeam? The Italian airline issued this statement:

Alitalia SAI has announced that it will not renew its partnership agreement and ancillary joint ventures agreements with Air France-KLM when they come up for renewal in 2017.

The agreements govern passenger services operated by the three carriers between Italy and France (and beyond), and between Italy and the Netherlands (and beyond), as well as the marketing, sales and distribution of Alitalia Cargo belly services undertaken by Air France-KLM.

The original agreements were concluded with Alitalia CAI (Compagnie Aerea Italiana) in 2009 and 2010 under very different economic circumstances, and were subsequently transferred to Alitalia SAI in January 2015.

Silvano Cassano, CEO of Alitalia, said: “These agreements are no longer beneficial, either commercially or strategically, to the new Alitalia and its ambitious turnaround plan. They were negotiated when Alitalia was in a very different position, with the result that the agreements in their current forms favor the other party.

“They are undermining our ability to restructure our network and the airline effectively to achieve the long term sustainability of our business.

“The new Alitalia is in a new position. Our business needs agreements which deliver equitable value to each party.

“For Italy and for Alitalia, our first priority is to win back the inbound tourism market, while better serving Italian leisure and business travellers.

“In our plans we also want to deliver up-to-date cargo solutions to the Italian manufacturing industry, the second largest in Europe, which has growing needs to export goods worldwide.

“We have indicated to Air France-KLM that we are willing to discuss more equitable arrangements that benefit all the parties involved, but thus far we have been unable to achieve this result.

“We remain open to further discussions to achieve a mutually acceptable solution. However in the interest of transparency and certainty for all parties, we felt it necessary to announce our intention not to renew these agreements under the present conditions.”

Alitalia (1st, 2nd and 3rd) aircraft slide show: AG Airline Slide Show