Etihad partner Alitalia will drop Rome-New York route to satisfy EU investigation

European Commission has concerns over codeshare overlaps.

Etihad’s equity alliance partner Alitalia is committed to giving up its slot on the Rome-New York route to resolve a European Union antitrust investigation.

The European Commission said that Air France/KLM, Alitalia and Delta – all members of the Skyteam alliance – have offered to make landing and take-off slots available at both ends of the Amsterdam-New York and Rome-New York routes to “facilitate the market entry of competitors”.

“The commission has concerns that the extensive cooperation between Air France/KLM, Alitalia and Delta in the framework of the Skyteam alliance, involving profit-sharing and the joint management of schedules, pricing and capacity, may result in higher prices on the following routes,” it said in a statement.

“The parties have jointly offered a set of commitments, to alleviate the commission’s concerns,” it added.

In January 2012, the EC opened a formal investigation into their cooperation on passenger transport on routes between Europe and North America.

In August, Abu Dhabi’s Etihad Airways acquired a 49 per cent stake in the debt-laden Alitalia in return for a €560 million (Dh2.62 billion) investment in an overall deal worth more than €1.75bn that will involve a three-year rebuilding exercise and rebranding of Italy’s national airline.

Analysts say that the commitment from Alitalia to give up its slot to New York route will not have a massive impact.

“This is unwelcome but it’s not a huge part of Alitalia, and in turn Etihad,” said Will Horton, a senior analyst the Centre for Aviation (Capa). “In the peak season this year Alitalia operated three Rome-NY flights and Delta one.”

“If another airline were to enter, it would most likely be a US carrier. For American and United, which wouldn’t have onward feed from Rome, the dynamics would be different – but not necessarily in a prohibitive way.”

Last month, James Hogan, the chief executive of Etihad, described the model of international carrier alliances as “fractured”. The Abu Dhabi airline has avoided entering into global alliances favoured by global carriers such as oneworld, SkyTeam and Star Alliance.

Mr Hogan cited what happened between Qantas, Emirates Airline and British Airways as an example of the “fractured” model.

Ties between British Airways and Australia’s Qantas were cut last year after the latter went into a partnership with Emirates, which is not a member of the oneworld alliance.

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