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BREAKING: Air Italy goes into liquidation – no more Avios earning or redeeming possible

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Air Italy, the Italian airline which was 49% owned by Qatar Airways, has been placed into liquidation.

Air Italy was an Avios partner, and indeed used Avios as its loyalty currency.  We didn’t talk about it much on Head for Points because it was NOT part of ‘Combine My Avios’.  Air Italy members could not move Avios to or from British Airways Executive Club, or vice versa.

You COULD redeem your BA Avios for Air Italy flights, however.

We wrote a couple of articles on redeeming Avios on Air Italy, such as this one.

Availability was good, but flights came with BA’s crazy surcharges attached.  A business class return redemption from Milan to San Francisco came with £588 of taxes and charges, for example.

Air Italy was, unfortunately, a bit of lost cause for UK residents looking to spend their Avios.

Air Italy goes into liquidation

Where did Air Italy come from?

In late 2017, Qatar Airways acquired a 49% stake in Italian airline Meridiana.  Meridiana was a slightly bizarre airline, to put it mildly, being part-owned by the Aga Khan and having a weird route network primarily flown by old McDonnell-Douglas aircraft.

Qatar Airways rebranded Meridiana as Air Italy, using the typical Qatar Airways colour scheme, and moved its hub from Palermo to the more practical choice of Milan.  Qatar Airways provided it with some A330 aircraft to launch long-haul routes which included:

  • New York
  • Chicago
  • Los Angeles
  • Miami
  • San Francisco
  • Toronto
  • Bangkok
  • Accra
  • Lagos
  • Delhi
  • Mumbai
  • Dakar

Air Italy goes into liquidation

What went wrong with Air Italy?

There seem to have been four factors which led to the demise of Air Italy.

The first was the inability to fund continuing losses.  Whilst Qatar Airways was happy to put more money into the business, it was not allowed to own more than 49% under EU legislation.  The Aga Khan, who owned the remaining 51%, was not willing to put further money into the company.

The second issue was the insistence of the Italian Government to keep Alitalia alive at all costs.  I have lost count of how many ‘final’ bailouts Alitalia has received over the years, or how much money it has lost.  With the Government refusing to let it die, it continued to sap passengers and revenue from other carriers which had a better chance of long term success.

The third issue was the Boeing 737 MAX crisis.  Air Italy had received a small number of aircraft but was still waiting for the bulk of its order.  This impacted its ability to run a full network of feeder flights for its long haul operation.

The fourth issue was the ‘angled lie flat’ 2 x 2 seating on its A330 aircraft which was increasingly uncompetitive.  That said, feedback on the food and service was positive.

Air Italy goes into liquidation

What happens next?

Air Italy has closed with immediate effect.

Its aircraft will continue to fly under contract for the next two weeks to repatriate as many customers as possible.  Beyond 25th February, passengers will be routed onto other airlines.  Full refunds are also on offer, so there is clearly some money left in the company.

Closer to home, IAG will take a hit as the sale of Avios to Air Italy ends.  It remains to be seen what will happen to Avios sitting in Air Italy accounts.

A full statement on the closure can be found on the Air Italy website here.

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Comments (23)

  • Tom says:

    To the surprise of…. pretty much no one.

    Air Italy was always a thinly veiled attempt by QR to expand its influence rather than a proper airline – this was never about making money for QR, only about circumventing the foreign ownership restrictions on EU airlines. Completely crazy business plan premised on offering QR standard service but with €1,000 business class tickets despite Western European labour costs and all the complicating factors that come from a business tied to the Italian economy.

    I see QR have already come out and blamed the failure on the Aga Khan, basically saying they were happy to keep pouring unlimited money into what was and would indefinitely remain a massively loss making airline. Clearly should have chosen a partner who shared that rather odd objective instead.

  • Concerto says:

    Right, now here’s a funny one. If it’s still flying until 25th February, would it still be possible to get a ticket and fly on one of the Sardinian routes from Milan? Milan is not far away for me and I don’t have any Air Italy flights in my log!

  • Charlieface says:

    People, please remember a credit card company is liable for consequential loss under s75, so you can claim for a NEW flight not just a refund.