Has an aviation proxy war broken out in Italy?

Italian airline Meridiana has been renamed Air Italy by Qatar Airways in its presentation of its development strategy. Air Italy’s fleet will be expanded to 50 aircrafts by 2020, with 20 Boeing 737 MAX aircraft to be added over the next three years. Flight destinations will be increased to 50 by 2022, including long-haul destinations New York, Miami and Bangkok.

Air Italy’s redevelopment highlights the company’s change of ownership: Qatar Airways acquired a 49% stake in AQA Holding, the holding company of Meridiana, in September 2017, while the previous sole shareholder, Alisarda, kept 51%.

“There will be a positive trend in the European market and we aim to become one of the top Italian airlines: elegant, sophisticated, international and innovative. We will make Italians proud in the world,” said Qatar Airways CEO Akbar Al Baker.

Meanwhile, Italy’s largest airline backed by the UAE, Alitalia, remains in limbo as it waits for a new buyer. In 2014, UAE’s Etihad Airways acquired 49% of Alitalia’s stake to transform the company into a modern operator. However, in May 2017, the company declared bankruptcy and Etihad Airways made it known that it will not extend any additional funds to Alitalia.

Qatar Airways’ subsequent acquisition of Air Italy, and now its redevelopment plan, takes advantage of Alitalia’s demise and could even be seen as part of a ‘proxy war’ in the aviation industry in light of the ongoing UAE-backed blockage against Qatar. Saudi Arabia, the UAE, Bahrain and Egypt cut diplomatic ties and closed their land, sea and air borders with Qatar in June 2017, after accusing the country of supporting terrorism. Mr Al Baker is one of Qatar’s most vocal critics of the blockade.

“Qatar Airways [has used the blockade] as a catalyst to accelerate their existing five-year plan. The airline has accelerated the introduction of new onboard services, introduced the best business class in the world, and firmed up agreements to acquire stakes in airlines all around the world, from Cathay Pacific in Hong Kong, to Meridiana in Italy,” said Alex Macheras, an aviation analyst who broadcasts on international networks including BBC News, Sky News & Al Jazeera. “Looking ahead to 2018, I expect the airline to expand its worldwide presence via new agreements, partnerships and acquisitions.”

Mr Al Baker said: “We are expanding. We’re keeping on stretching our global network. We are increasing frequencies and we are doing other investments that will give us positive returns on our balance sheet.” Qatar Airways initially predicted losses for the 2017 financial year, as a result of the blockade. However, these will be softer than first anticipated, said Mr Al Baker. The company’s annual financial results will not be out until late March.