March 5, 2008 / 12:22 AM / 9 years ago

Alitalia plan to quit airport bad news for Milan

<p>Passengers check for available flights at Malpensa's International Airport in Milan February 26, 2008.Alessandro Garofalo</p>

MILAN (Reuters) - It earns a mention in many travelers' lists of Europe's worst airports: Malpensa, built to be a trend-setter for Italy's fashion capital, may be the hub that never was.

Alitalia has proposed cutting flights through the airport as part of a corporate survival plan, and business people and politicians in northern Italy believe such a move would harm the region's status as Italy's economic powerhouse.

Praised when it opened 10 years ago for the low-key design of its interiors, Malpensa was intended to be one of Europe's top five airports.

In 2006 Malpensa -- whose name in Italian suggests bad thoughts -- ranked 15th for passengers, according to industry group Airports Council International.

"Ten years ago they were considered the Milan airport. Now they are just one of the airports around Milan," said Diogenis Papiomytis, an aviation analyst for consultancy Frost & Sullivan, of Italy's second-busiest airport.

Last year 24 million passengers passed through Malpensa's dull green and beige terminals, nine million short of the target set a decade ago for 2005. That figure -- 33 million -- was achieved by Rome's Fiumicino.

"It's a lousy airport, poorly designed and an embarrassment to the Italian country," Mitchell Handler, a U.S. executive with International Accessories Corp., told Reuters after arriving at Malpensa. "We use it because we have to."

Some people don't like Malpensa's decor, others can't find their way around, and many complain of its inconvenient distance from the city, as smaller Milan's Linate and nearby Bergamo eat into its share of the market.

But Malpensa's most pressing problem now is Italy's flagship carrier. Plans to cut flights by Alitalia, which is losing 200 million euros a year there as the airport's anchor carrier, are also in line with a broad programme drawn up by Air France-KLM, which may buy the state's 49.9 percent stake in the airline.

Northern Italy's business and political elite are fighting the cuts, which they fear would relegate Italy's economic engine to minor-league status in a globalizing economy.

Silvio Berlusconi, the Milan billionaire and opposition leader leading polls ahead of April elections, warned last weekend that the consequences of Malpensa cuts had to be thoroughly evaluated.

"The loss of Alitalia would add up to some hundreds of millions of euros, while the loss of Malpensa could mean billions of euros," he told a rally in Bari, in southern Italy.

A study commissioned by the Milan Chamber of Commerce estimated the cuts could cost Italy nearly 11 billion euros through to 2015, as well as 7,500 jobs.

Milan Mayor Letizia Moratti and other regional leaders are backing a moratorium of two or three years on any changes.

The chairman of Italy's biggest publicly traded construction firm, Impregilo, has even threatened to move his company's headquarters to London if the cuts go through.

'BABY COLOURS'

A decade ago, when Malpensa's new airport with design masterminded by post-modernist Ettore Sottsass started operations, Alitalia boasted it would become one of Europe's leading airports.

Sottsass is considered a genius, but not everybody appreciates his provocative work. Rising in the two greenish terminals, the lifts are strawberry pink.

For another traveler, Francesca Roveda, 45, the only real objection to Malpensa is in its look and feel. "Malpensa airport feels very provincial whenever I get back after seeing other international airports," she said.

"It was already old when they built it. And the 'baby colors' they've chosen really do not help."

Decor would be easier to fix than location and layout. With road links limited and the nearest rail station a 45-minute bus ride away even when highways are not jammed with traffic, passengers say Malpensa has proven itself lacking.

"I don't understand why, the (Malpensa Express) train doesn't take you to the main railway station in Milan," said businessman Mohammed Baradaran, 56, landing from Iran.

Malpensa has been forced to compete with Linate -- an airport nearer the city centre -- after a government plan to restrict Linate to flights connecting with Rome failed.

Once inside Malpensa, said Stefano Giordano, 38, a chemical company executive, it is hard to figure out how to get around.

"The problems start once you get here. Today I saw a group of people who kept going round as the northern lift does not go all the way up to departures. So they kept stopping here at the arrivals and did not know where to go."

HALVING ALITALIA FLIGHTS

Malpensa's 17 intercontinental destinations were already far below the average of more than 100 served by other European hubs. But Alitalia -- with a history of strikes, state bailouts and bloated staffing -- kept it as a second hub, assuming the extra cost of flying in pilots and stewards from Rome every day.

Alitalia has half the slots at Malpensa, but plans to roughly halve its daily flights to 170 as it shifts flights to Rome. The cuts include a 62 percent reduction in domestic flights, while intercontinental flights will drop to just three.

Oliver Jankovec, the director general of Airports Council International, said Malpensa's woes stemmed largely from Italy's lack of a consistent air transport policy as well as Alitalia's long-running crisis.

Both "play their part in holding back a higher increase in the passenger traffic of a country that remains extremely attractive to tourists," he told Reuters.

And if Alitalia is a problem for Malpensa, Malpensa could become an obstacle to Alitalia. SEA, Milan's airport operator, is seeking 1.25 billion euros in damages from Alitalia over the cutbacks, which may hamper talks with Air France-KLM.

Local leaders have voiced support for small airline Air One, whose offer for Alitalia the government snubbed last year, as a potential savior for Malpensa. But an Italian court has rejected its suit to force Alitalia to open takeover talks.

Even so, Malpensa's vacant Alitalia slots are unlikely to remain empty for long. British low-cost airline easyJet, the airport's second-biggest operator, will double its Malpensa fleet by January 2009, making Malpensa its biggest base in continental Europe.

And there is always a less fussy customer -- cargo. With 419,000 tonnes in 2006, Malpensa is by far Italy's biggest air cargo handler.

Additional reporting by Massimo Gaia in Milan and Alberto Sisto in Rome; editing by Sara Ledwith

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