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Air Dolomiti flies for Lufthansa
By Patrick Hoeveler
“A revolution within” would be an apt way to describe Air Dolomiti's entry into the Lufthansa regional network. The “freethinking regional carrier which could fly wherever it wanted” now has to connect 16 Italian airports with Munich. “We have been transformed into a 100% feeder-service airline,” says Air Dolomiti President Michael Kraus. The massive reorganisation of the airline into a feeder system began in 2004 and appears to have been the right choice for the airline which is based in Verona. “At the time when Lufthansa purchased us, we were a traditional regional carrier of a kind becoming increasingly rare today. Classic point-to-point traffic with small aircraft ceased to be viable in Europe some years ago. Regional airlines have no choice but to seek a network carrier or convert to a no-frills airline.”
Unlike the other members of Lufthansa's regional network, Air Dolomiti has been allowed to retain its own brand, service and identity. “We are an exception within Lufthansa,” says Kraus. “The value we contribute for mainly the Italian market is the fact that our roots are identifiably Italian. This also earns us sympathy among the Germans who fly with us to Italy and is therefore an extremely important part of Air Dolomiti. At Munich airport, we are almost as firmly established as Italians as we are in our base in Verona.”
As well as a good onboard service (“We always give something”), a feature which is no longer customary in this air traffic segment, the “Spazio Italia”, a gastronomic area by the Munich passenger gates, introduces a touch of Italian flair. The cultural link with Verona and its arena is also emphasised. Since May this year, all Air Dolomiti's aircraft have borne the names of famous Italian operas.
But providing such a pleasant service for its passengers does not come cheap. Hence the airline, with its workforce of 550, is no doubt being monitored closely by its parent company, which pays the unit costs and receives the revenue. “Air Dolomiti is forced to always be a little bit better. Only if it has a credible Italian identity does the concept make sense for Lufthansa. Levelling down would be fatal for Air Dolomiti,” warns Kraus.
However, the airline's success to date has vindicated this approach. In the first half year of 2006, it carried twelve percent more passengers than in the same period in 2005, and this was accomplished with two less aircraft. Two ATR 42's have left the fleet, while five BAe 146's, each configured with 99 seats, have replaced the five 48-seat CRJ200's to provide the necessary increase in capacity. The Italians operate about 750 flights per week to Munich. The biggest revenue-earner is the Milan-Munich route, which has seven flights a day with the BAe 146 and enjoys an average utilisation of up to 68 percent. Kraus expects the passenger figures for this year to total about 1.5 million, of whom perhaps 60 percent are business travellers.
No changes to the fleet are currently planned, but the airline President harbours hopes of acquiring more larger aircraft. “The day I can convert the fleet to 100-seaters I will be happy.” After all, given that extra slots are difficult to come by in Munich, Lufthansa is more interested in greater capacity than in more aircraft. Despite this, Kraus believes the potential is there to expand the fleet to 25 aircraft.
Originally founded by the Italian steel company Leali in 1989, Air Dolomiti has been controlled by Lufthansa since 2003, when the German carrier increased its equity holding from 20.7 percent to 51.9 percent through acquisition of the shares held by the company's founder, Alcide Leali. A few months later, it bought the remaining shares from the other shareholders.
At present it seems that Air Dolomiti's independent brand is no longer in question, given its success, as Kraus confirms. “Today things are going so well that this issue has ceased to be under discussion.” Relations between the two sides, Lufthansa as purchaser and the regional partner as service provider, appear to be good. “We may have fewer degrees of freedom than before, but in return we find ourselves in a situation that benefits both sides.”
From page 26 of FLUG REVUE 12/2006
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