BTN's annual answer book for business travel managers.
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Air Italy's Andrea Andorno talks:
Italian airline Meridiana rebranded itself as Air Italy this year and then last month launched its first U.S. routes: from Milan to both New York and Miami. Chief commercial officer Andrea Andorno spoke with BTN executive director of conference, content and strategy David Meyer and BTN assistant editor Dawit Habtemariam about Air Italy's plans for the corporate travel market.
BTN: How important are business travelers to your model?
Andorno: Very important. We are investing a lot in order to provide the best business class experience. We don't have a first class cabin. We only have a business class cabin. The idea is really to provide a really good product for the business class.
BTN: What about negotiating with corporate accounts? Is that part of your approach going forward?
Andorno: Yes. We have started with the Italian corporate accounts. Fortunately, looking into the States, we have lots of fashion, as well as other primary industries flying regularly to Milan for business and Miami for vacation. Now we're also looking for their part of the corporate in New York and also some other American corporate accounts that might be interested in trying the product.
BTN: What did you learn about Alitalia from working the corporate market?
Andorno: The financial distress gets you in a very ugly environment. It's not easy to sell something [when] you might end up cutting services the day after, so that really betrays the market. The corporate market is very sophisticated, so they want a reliable service which is rich and stays rich. The [Air] Italy project has actually been built to stay rich and to move forward. The Milan market offers a great opportunity as a market that has been left by my previous company, [Alitalia]. Milan is becoming one of the best cities to visit in Europe. Therefore, we're sitting on a very good market. Originally it was only outgoing rich Italians, and now it's becoming mostly an incoming market. The project is on a very solid basis for success.
BTN: How are you targeting corporates? Are you reaching out to them?
Andorno: Yes, it's quite a fierce competition because we're talking about the Milan-JFK [route]. Quite a number of players there, so you really have to have the right proposition in terms of value. We have a long-lasting relationship with British Airways, as well as Iberia, and we have been quite a joint group for quite some time. There is a complete member [program] proposition for them on our flights, as well as on BA and Iberia. (Air Italy country sales manager Ron Glickman added that Air Italy accepts UATP.)
BTN: Are there plans for other U.S. destinations?
Andorno: The idea really is to serve the demand out of Milan when we see there is an opportunity, so the project is very global. We fly Lagos, we fly Accra, we fly Dakar and unique destinations in Italy and Europe. As long as we find market opportunities, including the States, we look into this because we're envisioning a very, very strong growth—long haul, as well as short and medium haul. So [for] the States, you cannot claim to be an important carrier unless you fly to New York, and we have been studying [Miami] for some time and we knew it was underserved, especially for the Milan and Italian part of the market. Now we are looking to go eastbound. Then, going forward, the next round is probably going to be again global, not necessarily the States, but the States sooner or later will come because if you go and rank out of the top destinations from Milan, you get some American destinations for sure.
BTN: What's Alitalia’s impact on Air Italy?
Andorno: This project became a huge opportunity because of Alitalia's weakness. We cannot deny that. A very strong carrier covering Rome and Milan probably would make it more difficult for us to start. Milan is totally left by itself, especially in long haul, so if you only have outside players coming in, you won’t really have a reference player for the city. We want to be the top carrier in Italy, which doesn’t mean market share. It means we want to be the best in quality. We want to be the reference, so when you are sitting in New York and you say you want to go to Italy, [you say,] "I will choose Air Italy." We want to give Italians a national iconic carrier, something they can be proud to fly with because it matches in terms of quality what other players do.
BTN: What’s it going to take to get there?
Andorno: We are offering a real quality. In terms of size, we are aiming at 20 million passengers by 2022 with approximately 50 aircraft. That is our first target. We know that other carriers carry more passengers in Italy. We don’t really look at the figures in terms of numbers. There are other domestic players that are very aggressive. We are positioning ourselves very far from that business model because our domestic proposition is really aimed at feeding our long haul.
BTN: Do you have plans to invest in the infrastructure of Malpensa airport?
Andorno: We are working with SEA, the airport company, in Milan to improve the airport. And some has already been achieved because we have been working with them for months, so if you go to the airport today, you see they are working and they have done major improvements.
BTN: Besides the planes and Malpensa, what’s the biggest area of big investment?
Andorno: A lot of advertising for the new brand will come up because it's true that we have called it Air Italy as part of the strategy. We wanted to start with a fresh approach from scratch for the new brand. Also, because Meridiana, our previous brand, was quite costly to explain. Now with Air Italy we have overcome such a thing because when we go out and we say it's Air Italy, immediately we are an airline that flies to Italy. To explain the rest, we have quite a huge budget, we are really positioning ourselves against carriers with bigger shoulders.
BTN: There is a relationship with Qatar [Airways] beyond its financial investment in Air Italy, right?
Andorno: There is some in terms of expertise and in terms of quality, but the projects are very much separate. As I said, ours is a very independent project focused on a market which is Italy, and that's pretty much the way it is today.
BTN: Business travel is changing. What does Air Italy need to do differently to meet business travel needs?
Andorno: The idea is really to [be] very valuable to business travelers without being as expensive, but there is some value we are currently offering. Also, currently we want everybody to test our flights. We are so sure that once you fly with us, you will keep on flying with us because you feel the difference. Our proposition is to be quite aggressive on the market in order to get passengers on our flights to try, which is something we hadn't been able to do in our previous experience. We are so sure of the quality of our product.
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