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Italy sees full recovery driven by low-cost carriers

Italian Market review

As the world steadily emerged from the shadows of the Covid-19 pandemic, Italy’s aviation sector witnessed a significant resurgence. The previous year marked a robust rebound in passenger traffic, with airlines and airports bustling with renewed activity.

Low-cost carriers played a pivotal role in boosting frequencies, expanding capacity, and launching numerous new routes in the Italian market. This strategic response effectively addressed the widespread global demand for holidays throughout the country.

During 2023, Italy was Europe’s fifth-largest market by available capacity, with just over 195.8 million seats, exceeding its previous record set during the pre-pandemic 2019 when it had 194.6 million seats, Cirium schedules information shows. This represents a significant achievement, considering how impacted Italy was by the global health emergency.

Ryanair is Italy’s largest airline

Ryanair is Italy’s largest international and domestic carrier, the latter having been attained in 2021. On the other hand, the ULCC became the country’s largest international airline back in 2008.

Ryanair has capitalised on the turbulent times faced in the last decade by Italy’s national carrier, once known as Alitalia and now operating under a new brand, ITA Airways, since late 2021.

Ryanair had about 34% of Italy’s capacity in 2023, three times more than the second-placed ITA. The budget airline had nearly one in two domestic seats (46%) and three in ten international seats (28%),

Ryanair operates on average 317 flights per day, on 111 routes across Italy. Among Europe’s largest markets, Italy is the only one where more than half of domestic capacity is operated by non-domiciled carriers.

Italys airline development

ITA Airways’ future in Lufthansa’s hands

ITA Airways, the derivative of Alitalia which went bankrupt in 2017 and ceased trading in October 2021, is a shadow of its predecessor. During 2023, it served an average of 50 destinations, mostly from the nation’s biggest cities of Rome, Milan, Naples, Catania, and Cagliari.

With 20.4 million seats on the market, it was Italy’s second-largest airline, however, its total capacity contracted by nine million seats compared to 2019. Some 60% of ITA’s total capacity last year was on domestic flights. Whereas Alitalia was Italy’s leading domestic airline in 2019, ITA Airways shed over four million seats on the domestic market compared to its predecessor.

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Despite being significantly smaller than Alitalia, it is not all doom and gloom for Italy’s national carrier. The airline has an impressive orderbook of new Airbus aircraft, which are being delivered and will enable it to launch a number of new routes in 2024.

Italys biggest Airlines 2023

Lufthansa will take a 41% stake in ITA, pending regulatory approval, in return for a 325-million-euro investment in the airline, while the Italian government also makes a contribution of 250 million euros to the airline.

The deal seems to include an option for a full takeover at a future point in time, but without obligation and depending on the success of the business turnaround achieved over the next couple of years. ITA and its predecessor, Alitalia, has not made a profit for 20 years, and Lufthansa’s attempt to improve the business is expected to have a big impact on the Italian aviation market in the years ahead.

Italy has 40 commercial airports

Last year, Italy had commercial flights to 40 airports, based on having at least 1,000 available seats. Unsurprisingly, Rome Fiumicino was the busiest.

Rome Fiumicino secured its position as Europe’s ninth-busiest airport in 2023, just surpassing its pre-pandemic passenger performance. Capacity-wise, it had 49.7 million seats on the market, which was still down 10% on 2019. This decrease is primarily attributed to ITA Airways operating a notably smaller network. Nevertheless, it further amplifies the stronger loads seen on flights across the airport’s network of destinations compared the pre-Covid era.

Rome Fiumicino is also by far Italy’s busiest long-haul market. During Q3 2023, the busiest quarter of the year, it had 41 long-haul destinations. New York JFK was overwhelmingly the most served and has expanded rapidly, with up to 63-weekly departures during the peak of summer.

Top Italy routes

Rome also saw a return of Chinese carriers as the Asian market reopened over the year and travel surged. The Italian capital is now served by five carriers from China, same as in 2019, however capacity in 2023 was still down 22% on 2019.

Throughout the nation, smaller airports and those catering to popular vacation destinations experienced a significant upswing in activity during 2023. Numerous airlines, particularly those hailing from the Middle East, have introduced direct flights to meet the growing demand for leisure travel.

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