LONDON: EasyJet is still talking to the Italian government over Alitalia’s short-haul operations but the head of the budget airline stressed on Thursday that any deal needs to make commercial sense.
EasyJet, Germany’s Lufthansa and fellow budget carrier Wizz Air submitted expressions of interest this year for Alitalia or parts of its business, but the lengthy formation of a new anti-establishment government delayed the process.
EasyJet Chief Executive Johan Lundgren said that any deal had to be strategic, had to be something the firm could handle operationally and had to make commercial sense.
“Those are the things we are looking for and those are the discussions we are having. And sometimes the discussions are progressing faster and sometimes they are progressing a little bit slower,” he said at the Aviation Festival industry event.
Earlier on Thursday easyJet also said Singapore Airlines was joining “Worldwide by easyJet,” a service it launched last year to offer long-haul destinations without the need for costly and complex interline and codeshare agreements.
Closer to home, Lundgren said that he had been reassured by both Brussels and London that at least a basic agreement would be in place to enable flights to continue after Brexit next March.
Alitalia, a symbol of Italy’s post-war economic boom but now struggling to compete against low-cost carriers and high-speed trains, was put under special administration last year.
Italy’s previous government initiated a sale process, but the country’s new administration wants the majority of the loss-making carrier under state control.
Transport Minister Danilo Toninelli said in July there was a need for 51 percent of Alitalia to be kept in Italian hands “but with a strong investor next to it.”
However, the state-appointed commissioners who are running Alitalia said last month that three offers they had received were not appropriate, and they had not entered exclusive negotiations with any bidder.
“The government and the state would like to have a stake in there but that still leaves things open for potential other partnerships,” Lundgren told reporters. “So that’s what we are in discussions with them about.”
Under the Singapore Airline’s agreement, easyJet’s customers will be able to connect with Singapore’s flights via Milan Malpensa and with Singapore’s low-cost subsidiary Scoot via Berlin Tegel later this year.
Lundgren said 10 airlines, including Norwegian and WestJet, were now partners in the program, and he was in talks with other carriers to join.
He also said easyJet was working on contingency plans to cope with Brexit and it wanted clarity on Britain’s future trading relationship with the European Union.
“We know regardless of what’s going to happen in terms of deal or no deal that there will be a bare bones agreement in place,” he said.
“That’s very clearly confirmed to us in the discussions we had both from Brussels but also from Westminster. It would be inconceivable there would be no flying between UK and mainland Europe.”
EasyJet still interested in Alitalia’s short-haul business
EasyJet still interested in Alitalia’s short-haul business
- EasyJet, Germany’s Lufthansa and fellow budget carrier Wizz Air submitted expressions of interest this year for Alitalia or parts of its business
- EasyJet Chief Executive Johan Lundgren said that any deal had to be strategic, had to be something the firm could handle operationally and had to make commercial sense
Global brands shut Middle East stores as conflict causes chaos
- Luxury brands and retailers close stores in Middle East
- Conflict threatens the region that has been luxury’s fastest growing
- Mass-market retailers monitor situation, adjust operations in region
PARIS: In Dubai and other major Middle Eastern shopping hubs, many stores are closed or operating with a skeleton staff as the escalating conflict in the region causes chaos for businesses and travel.
The US-Israeli air war against Iran expanded on Monday with no end in sight, with Tehran firing missiles and drones at Gulf states as it retaliates for a weekend of bombing that killed Iran’s supreme leader and reportedly killed scores of Iranian civilians, including a strike on a girls’ primary school.
Chalhoub Group, which runs 900 stores for brands from Versace and Jimmy Choo to Sephora across the region, said its stores in Bahrain were closed, while other markets, including the UAE, Saudi Arabia, and Jordan remained open though staff attendance was “voluntary.”
“We operate with a lean team formed of members who volunteered and feel comfortable to come to the store,” Chalhoub’s Vice President of Communications Lynn al Khatib told Reuters, adding that the company’s leadership team personally visited Dubai Mall and Mall of the Emirates on Monday morning to check in with workers.
E-commerce giant Amazon closed its fulfillment center operations in Abu Dhabi, suspended deliveries across the region and instructed its employees in Saudi Arabia and Jordan to remain indoors, Business Insider reported on Monday, citing an internal memo.
Gucci-owner Kering said its stores were temporarily closed in the UAE, Kuwait, Bahrain and Qatar and it has suspended travel to the Middle East.
Luxury growth engine under threat
Shares in luxury groups LVMH, Hermes, and Cartier-owner Richemont were down 4 percent to 5.7 percent on Monday afternoon as investors digested the knock-on impacts of the conflict.
The Middle East still accounts for a small share of global spending on luxury — between 5 percent and 10 percent, according to RBC analyst Piral Dadhania. But the region was “luxury’s brightest performer” last year, according to consultancy Bain, while sales of expensive handbags have stalled in the rest of the world.
Now, shuttered airports have put an abrupt stop to tourism flows into the region and missile strikes — including one that damaged Dubai’s five-star Fairmont Palm hotel — are likely to dissuade travelers, particularly if the conflict drags on.
“If you assume that it’s a $5 billion to $6 billion (travel retail) market and let’s say it’s going to be shut down for a month, we are talking about hundreds of millions of dollars that are definitely at risk,” said Victor Dijon, senior partner at consultancy Kearney.
If Middle Eastern shoppers cannot travel to Paris or Milan, that could also hurt luxury sales in Europe, he added.
Luxury brands have been investing in lavish new stores and exclusive events across the region. Cartier unveiled a “high-jewelry” exhibition in Dubai’s Keturah Park just days before the conflict started.
Cartier and Richemont did not reply to requests for comment.
Luxury conglomerate LVMH has also bet big on the region. Last month, its flagship brand Louis Vuitton staged an exhibition at the Jumeirah Marsa Al Arab hotel, and beauty retailer Sephora launched its first Saudi beauty brand.
LVMH does not report specific figures for the region, but in January Chief Financial Officer Cecile Cabanis said the Middle East has been “displaying significant growth.” LVMH did not reply to a request for comment on how its business may be impacted by the conflict.
The Middle East has also attracted new investment from mass-market players. Budget fashion retailer Primark said in January that it plans to open three stores in Dubai in March, April and May, followed by stores in Bahrain and Qatar by the end of the year.
“Primark is set to open its first store in Dubai at the end of March but clearly this is a fast-moving situation which we are monitoring closely,” a spokesperson for Primark-owner Associated British Foods said.
Apple stores in Dubai will remain closed until Thursday morning, the company’s website showed, while Swedish fast-fashion retailer H&M said its stores in Bahrain and Israel are closed.
Consumer goods group Reckitt has told all employees in the Middle East to work from home, temporarily closed its Bahrain manufacturing site and suspended all business travel to the region until further notice.
