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Why One of America's Top Airlines Is Eyeing to Buy One of Europe's Most-Troubled Airlines

Feb. 11, 2019
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3 min read
ITALY-TRANSPORT-ALITALIA
Why One of America's Top Airlines Is Eyeing to Buy One of Europe's Most-Troubled Airlines
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Alitalia's financial troubles have seen the airline file for bankruptcy twice — the first back in 2008 and most recently in 2017.

Despite Etihad securing a partnership through a 49% stake in Alitalia in 2014, the state of the Italian carrier's finances has remained turbulent. Since then, airlines, including Lufthansa, have gallantly entered bids for the Italian flag carrier, with Delta and EasyJet being the latest to enter the race in 2018.

A recent twist has shown the possibility of an alliance between one of the biggest carriers in the US and one of Europe's leading low-cost airlines — Delta and EasyJet. The joint takeover would mean the two carriers would share Alitalia's long-haul and short-haul aircraft, as well as the slots out of the airline's Italian hub airports in Rome (FCO) and Milan (LIN; MXP). Though Delta can't own 100% of Alitalia, its partial ownership with EasyJet could bypass restrictions about foreign entities owning 50% or more of a European airline.

In terms of route opportunities, the joint takeover could see Delta increase its market share on routes it already operates to Rome (FCO) and Milan (MXP) — also Alitalia's long-haul hubs. Perhaps more interestingly, Delta could have the opportunity to takeover Alitalia's current route network and expand its route network from more US destinations, such as Boston (BOS), Chicago (ORD), Los Angeles (LAX), Miami (MIA) and Washington, DC (IAD). The transatlantic market is arguably one of the most competitive in the industry, and with added pressure from long-haul, low-cost carriers like Norwegian, Delta could see it as time to step in and improve Alitalia's 'adequate' transatlantic crossings.

In the same way, EasyJet could hope to increase its market share in Italy, a country that has been dominated by low-cost rival Ryanair. A joint takeover bid with Delta could see EasyJet becoming a force to be reckoned with in Rome (FCO) by acquiring Alitalia's European slots. Elsewhere, in Italy's Northern city of Milan, EasyJet already holds a strong position at Malpensa (MXP) serving dozens of destinations all across Europe. At Linate (LIN), however, the European low-cost airline currently only operates four routes. So an acquisition of Alitalia's European routes here could see a huge increase in EasyJet's Italian market share as well as feeding passengers from across Europe into Delta's Italy-US routes.

Featured image by AFP/Getty Images

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Why We Chose It

There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)

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  • 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
  • Packed with credits foodies will enjoy
  • Solid welcome bonus

Cons

  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
  • Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
  • Terms Apply.