EU seeks Alitalia - Air Serbia concession

Alitalia and Air Serbia to ease European Commission competition concerns

Alitalia will give up some slots on its Rome Fiumicino - Belgrade route to its European competitors, with the Italian carrier under scrutiny from European Union aviation authorities after 49% of its shares were recently acquired by Etihad Airways. Sources close to the European Commission have told the Reuters news agency that the Abu Dhabi-based airline has been discussing possible concessions to offer in return for European antitrust approval. A person familiar with the matter noted that the carriers “are likely to secure EU approval if they offer minor concessions”. As such, the route between the Italian and Serbian capitals, which Alitalia serves daily, as well as other route concessions, may be freed up to European rivals such as Lufthansa and Austrian Airlines.

The European Commission has said it will decide by November 17 whether it will clear Etihad’s takeover of Alitalia. It did not provide details of the concessions, in line with its usual policy. In previous airline deals, the EU authority has demanded airlines give up airport slots, facilitate rivals’ access to connecting traffic or open up their frequent flyer programmes to ease competition concerns. Maurizio Lupi, the Italian Minister for Infrastructure and Transport, says that he sees “no obstacles” to the Etihad - Alitalia deal and expects their partnership to be fully operational by January 1. This is believed to be the first time that Mr. Lupi, who has been a key player in the Italian government’s negotiations with Etihad, has set a specific date for the alliance to launch.

Alitalia and Air Serbia hold a duopoly over the Rome - Belgrade route, making it unclear which other airline could step in to take the conceded slots. Last week, easyJet terminated its three weekly service between the two capital cities due to poor ticket sales. The budget airline is not the first to suspend flights between Rome and Belgrade. In 2012, Wizz Air cancelled the same route citing high seasonality. Wizz originally intended to operate the flights on a seasonal basis but ultimately suspended the service altogether. Both Alitalia and Air Serbia codeshare on each others’ flights on the route. During the first half of the year, Alitalia more than doubled its operations to the Serbian capital compared to last year.