Now you might have heard, over the last number of months, that ITA Airways has been building a network of partnerships that essentially reconstruct the one Alitalia had.
The latest one, however, was quite overlooked for what it represents in the local Italian market. ITA is partnering with Neos, the other relevant national airline.
You may not know Neos, but it is a relevant player in the local leisure market. It belongs to Alpitour – a major tour operator in Italy – and it currently operates a fleet of nine Boeing 737 and six Boeing 787 widebodies.
With the help of Cirium’s Diio Mi application, let’s get into their networks’ peculiarities to see why this partnership makes sense for ITA and why it is the most overlooked yet.
It should be more discussed not because of its size – Neos is just the 10th largest player in Italy by ASK capacity in June – but because of what it represents.
Neos’ official statement, republished by tourism website TTG Italia, says that initially, the agreement will comprise of just a bunch of routes, in order to feed a number of Neos’ flights from Fiumicino by integrating domestic ITA flights from Bari, Brindisi, Catania, Lamezia Terme, and Palermo.
ITA hasn’t yet published a press release about the topic, nor answered to our email requesting more information about the partnership. Their website is not yet selling Neos flights, although Neos’s website is selling ITA+Neos tickets already.
But the most important part of Neos’ press release was the one that said, according to TTG Italia, that this is the beggining of “a work in progress which will bring an increase in routes and destinations reachable with a single check-in and a single luggage dispatch [in the same booking].”
And how can ITA benefit from that? If we take Neos’ current scope, we can see why.
This map might make you think that Neos is an Italian powerhouse, but it is not. While its network is quite extensive, the airline is completely leisure-focused. This makes its network very diverse and with a very low frequency in each one.
For July, for instance, not a single route is operated daily. The closer it gets to is its Sharm el-Sheikh-Malpensa run, operated 19 times.
ITA’s network, meanwhile, is more focused on the corporate passenger, and only two routes for July (Rome-Algiers and Algiers-Rome – each way of a route is counted as a different one) is planned to be operated less than daily, out of 112.
Neos, meanwhile, has 197 different connections, despite having 35.07% of ITA’s planned capacity by ASKs and merely 18.24% of ITA’s capacity by seats.
So, all in all, both airlines’ networks are fundamentally different and, as a consequence, highly complementary for both. In a way that both could benefit from a partnership going forward. Neos, by gaining further feed, especially in its flights leaving Rome/Fiumicino, and ITA’s, largely increasing its distribution capacity into tourism hotspots, should it start to sell Neos’ flights.
As it is known, ITA and Neos cannot compete in price with their low-cost competitors – namely Ryanair, which is, by a lot, the largest player in Italy. Also, it has a large network from Italy to other tourism destinations. This way, increasing their own network. Especially considering that Ryanair cannot go long-haul, might be a wise idea.
In Rome/Fiumicino, for instance, Neos does not overlap with ITA in any routes, which virtually means that Neos would not cannibalize ITA’s traffic if it was to share every route it has from the said airport.
The graph below (airports served from Rome/Fiumicino in July according to Cirium’s Diio Mi) shows that, by allying to Neos in Fiumicino, ITA would get to a close second to Ryanair in terms of served destinations.
For July schedules from Fiumicino, ITA currently competes directly with Ryanair in seven routes: Athens, Barcelona, Bari, Brindisi, Madrid, Palermo, and Tel Aviv. By selling Neos operated flights, Ibiza and Menorca would join in.
All in all, this partnership is naturally centered in Rome. It would make no sense for ITA to sell Neos flights elsewhere, as its network is heavily centered in Fiumicino. This will help Alitalia’s short-haul flying while helping fill Neos’ Fiumicino flights, especially the long-haul ones.
From Italy’s perspective, it was a partnership that was a long time coming. The negotiations, in fact, were started still during Alitalia’s years, and a very welcome one at that. It won’t make or break ITA’s or Neos, but it undeniably helps both airlines, while also increasing itinerary options for Italian consumers.
