United Airlines will serve Rome year-around from its Newark hub. Might this be a plan to hasten Alitalia’s demise?
Currently, United offers seasonal service to Rome from the following hubs:
- Chicago (ORD)
- Newark (EWR)
- Washington Dulles (IAD)
While ORD and IAD will remain seasonal, Newark will shift to year-around service, with service between three times per week and daily between November 09, 2017 and March 08 2018.
United uses a 767-400 on the route (39 business / 203 economy) during the summer months. During the winter season, United will use a 767-300 (30 business / 184 economy).
Is United Trying to Bankrupt Alitalia?
Beleaguered Alitalia is on the verge of losing its New York City slots, a source of 15% of worldwide revenue. Should Alitalia go under, its daily New York flights would leave a significant gap in service.
United may be trying to hasten Alitalia’s demise by saturating the market with seats. Or perhaps United is betting that Alitalia will go under whether it competes or not and is merely trying to prepare for increased demand once the carrier folds. Perhaps it just wants to discourage American, Delta, or even Emirates from expanding Rome service.
United’s Rome is timed for connections. Atlantic Sales VP Marcel Fuchs stated–
Our service to Rome is timed perfectly for customers making connections from more than 75 cities around the U.S. and Latin America, and it offers our Italian customers another convenient way to see New York or connect to other destinations throughout the U.S.
It’s interesting to me that on this route in which United has chosen to compete on a head-to-head basis with Alitalia, it is not more vocal in condemning Alitalia for continuing to receive “illegal subsidies” that have kept the carrier afloat for years beyond its shelf life. I guess United is too busy being bullied by Emirates and Etihad…
CONCLUSION
I’m happy to see United will be serving Rome year around, even as I question the motives of the additional service. Whatever the reason, though — keep an eye out of award space. It may be a great opportunity to book a New Year’s trip to Italy.
I would not rule out your reasoning but I suspect that competition with Norwegian is the main reason here. It will definitely have an impact on Alitalia, if it’s still around.
http://www.reuters.com/article/us-norweg-air-shut-rome-idUSKBN18R125
Also a protective move, Don’t forget Norwegian is scheduled to start NYC-Rome service too!
When in Rome…
also to combat against Norwegian’s upcoming flights from EWR-FCO on 787s 4x Weekly in November…
I think one would argue, although less so for long-haul international, that EWR and JFK are two distinct markets. The more compelling analysis is to asses to what degree this decision was spurred by Norwegian beginning 4x weekly flights FCO-EWR, increasing to 6x weekly in Feb 2018. Seems to me that is a more direct threat to UA’s seasonal FCO operation than a handful of Alitalia flights that operate to JFK (and have for many, many years).
yeah they wont fold, the national pride is at stake.
One can only hope UA flights will feature Olive Garden authentic Italian dishes to cater to the most discriminating palates. 🙂
Just flew Emirates to Milan from New York in business and was duly impressed as most are. While on board the Purser and I were chatting at the bar (very cool) and he specifically told me that the government of Dubai owns and puts money into Emirates. I get that is just an FA in essence; but it lends credence to the complaints of United, American and Delta regarding the gulf carriers.
I personally don’t have a problem with the government subventing the gulf carriers, just as I don’t have an issue with the Italian government giving Alitalia 6 month bridge loans. Despite Alitalia current situation, there is literally no doubt that Alitalia has improved their hard product over what they had just 5- years ago.
Having said that, American, Delta and especially United need to upgrade their offerings on both domestic and international. If they just put into a 777 the same first or business experience one finds in a gulf flight; they’d have no competitive disadvantage; government subsidy or not. Maybe then people would be willing to jump on a United or Delta flight to Europe as they currently clamor to board an gulf flight to Milano – and yes we paid a lot more for the econ and bus tixs than the US carriers were charging.
With the profits that the us carriers are making and have been for the past few years, there no longer is an argument to allow them to absorb those profits to replenish for massive bleeding in the past. United Polaris is way off to fruition, Delta One is not anywhere near Emirates Business and American… they upgraded but they aren’t there yet either.
I dislike United based on their East German Stazi employee attitudes. However, I applaud them for going head to head with a storied and proud national airline, Alitalia. I hope United continues to compete, upgrade and properly train their staff to be more Emirates like and less Ryan Air like.
“United may be trying to hasten Alitalia’s demise by saturating the market with seats. Or perhaps United is betting that Alitalia will go under whether it competes or not and is merely trying to prepare for increased demand once the carrier folds.”
I would venture the latter is more true than the former. It is much more difficult to build a strategy around ‘putting your competition out of business’ than stories might make us think. When the proposal is made, inevitably somebody understandably asks, ‘How much? How long? What if they don’t go down?’
Looking at the the surface situation as outlined here, you have a weak carrier (Alitalia) with a deep pocketed investor behind them (Emirates) and the emotional pull of ‘national prestige’ raising the possibility of a government intervention. Both are wildcards that would make any ‘knockout’ strategy very risky. Then add the additional wildcard of that there is no guarantee that UA would be the chief beneficiary of Alitalia’s demise. In fact, I would posit the notion that UA runs a serious risk of being in an even worse position should Alitalia fail. With 15% of her revenue dependent on this route, Alitalia is an ideal ‘weak’ competitor that is in no position to engage in a fare war for these seats. If Alitalia goes out, UA may find herself in a dogfight for dominance…and profit.
My guess would be that UA is currently making money on this route, and expects to make money on the additional flights. The additional flights have the added benefit of hedging against the possibility that Alitalia goes away, opening this route to a fight that would have happened regardless of UA’s actions.
Just to be clear, Alitalia is already bankrupt. They have a short period to try and find a buyer or turn it around under state protection, so they aren’t circling the drain so much as hanging onto the lip over the precipice. I don’t know if the Italian government can even put in enough money to save them now, as they would need a partner and no one is going to follow Etihad down that hole.
“…Alitalia is already bankrupt.”
Excellent point. I somehow missed that story.
Makes one scratch their head at the story headline.