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Optimism in the face of adversity

This year’s fourth quarter will go down in history as one of the worst ever for the airline industry. In the face of airlines collapsing, laying off of employees by the thousands and cutting long-established routes how could anyone involved remain optimistic? James Stagno Navarra, British Airways’ Malta country manager told RAY ABDILLA why the company holds high hopes for the future, despite the airline slump

Like all airlines, British Airways’ operations as a whole were affected by the 11 September tragedy, but how did British Airways’ local operations fare in the wake of the tragedy?

The events of 11 September were so shocking that everyone around the world was affected by them in one way or another. Just after 11 September, there was some nervousness amongst passengers but we discovered quite quickly that European traffic had returned to normal and Maltese travellers began flying again very quickly. However, transatlantic traffic did suffer in the tragedy’s immediate wake.

While I don't think people will ever forget the events of 11 September, I am pleased to say that in terms of air travel we are seeing some signs of recovery in our transatlantic markets and we are very eager to sustain this momentum.

British Airways, in line with lower passenger volumes, was forced to lay off part of its work force and to suspend certain flights. Was the Malta route ever scheduled for the shelf?

There was a time when BA had stopped its local operations, so there was a certain degree of fear over the local market.

However, there has been no impact on our people working in Europe. It is true that we have announced a reduction in numbers of around 7,000 people across the global business, but it is hoped this will be achieved through voluntary methods before any forced redundancies would be necessary.

Fear of flying hit most passenger segments the world over, but how do you think the Maltese adapted after 11 September?

At first people were concerned, but as time goes by we are getting back to normal. As I said before, our transatlantic routes were worst hit, while European travel recovered fairly quickly.

Being British airlines, and with Britain being involved very much in the Afghan issue, were people more frightened to board a BA aeroplane?

Security measures at British airports are amongst the best in the world and British Airways puts safety and security at the very top of its agenda. Our passengers, of course, wanted reassurance that we had put the right level of security measures in place to protect them - and we were able to do this very quickly.

What kind of changes, security-wise, are British Airways banking on?

We are fully compliant with all Department of Transport, Local Government and the Regions (DTLR) and Federal Aviation Authority (FAA) security regulations.

Security measures prior to the US attacks included screening of flying crew and ground staff; screening of passengers and cabin baggage; baggage and passenger reconciliation; security controls for cargo, courier material, mail and catering; searches of aircraft and controlled access to restricted areas; team of trained security auditors who carry out security spot checks world-wide; 100% screening of hold baggage ex-UK and ex-USA and other airports; and 100 per cent screening of hold baggage in Malta.

New security measures introduced since the US attacks include additional passenger and hand baggage searches at boarding gates; locked cockpit door; in-flight visits to the flight deck are banned; as are the carriage of sharp implements on board; we have also replaced metal cutlery with plastic cutlery and reinforced cockpit doors with a metal plate and new, stronger locks to prevent break ins.

We are also closely examining the use of CCTV in the passenger cabin. For many years British Airways has led the aviation industry in security matters and participates actively in the IATA Security Executive Committee BA represents AEA at ECAC (European Civil Aviation Conference) BA is represented on a number of UK government securities working groups.

British Airways is one of the most famous airlines in the world, why do you think it was viable to keep the Malta route open?

The Malta route is successful. Since coming back into the route with GB Airways, we have seen market share increase and the route continues to bring a good mix of both business and leisure travellers.

What about the incoming market, what do you expect for next Easter and summer?

Forward bookings for next summer are up five per cent on the previous year. This is obviously a very encouraging position for Maltese tourism.

Do you think that slashing prices helped passengers to overcome their fear of flying?

Tactical fare promotions have been used successfully to stimulate the market, particularly the business travel sector, and customer response to these promotions is extremely positive.

But with insurance tariffs going up, security measures being upped and other measures being taken, how viable is it to slash prices? The margin of profit is not that huge, even less so with all the measures being put in place.

However, it's not simply a case of slashing prices - we run tactical promotional fares from time to time to stimulate demand as and when we feel the market demands it.

Air Malta is your primary, if not only, local competitor. Ticket prices are practically the same and both are said to have a good service. What do you do to gain the leading edge?

British Airways offers an alternative carrier for travellers from Malta. We continually invest in our on-board and ground products and just two years ago invested GBP200 million in a new Club Europe cabin - providing passengers with leather seating, new menus and wines and stylish interior with new crockery, glass and tableware. We are also able to offer regular travellers membership to our highly successful Executive Club programme, which is designed to reward passengers for their loyalty.

With many Maltese now preferring to fly direct to their end destination, such as Manchester and Leeds, would BA consider introducing direct flights to other UK destinations – apart from London?

We offer passengers connecting flights to all domestic markets in the UK through Gatwick Airport and our flight connection centre at the airport makes the whole process extremely simple. There is simply not enough demand to justify introducing direct flights.

How would you see EU membership for Malta affecting BA’s local operations? What about the introduction of the euro, how is that affecting BA’s balance sheets?

The EU issue is really a matter for the Maltese, British Airways is ready to do business whatever the market conditions.

As for the euro, I don't think this is relevant. British Airways is already doing business in the euro and the currency does not seem to affect people's decisions to travel.

What are your views about the airport tax at MIA, is it hampering business and do you think pressure should be applied to the government, with a view to reducing the taxation on tickets?

We are concerned about the governmental tax on tickets purchased in Malta. However, as this applies to all airlines operating in Malta, it does not present us with any issues of fair competition. But we do feel it is unfair that people living in Malta are disadvantaged and we believe the government should reconsider its options.

What can the Maltese consumer expect from BA in the future, in terms of special packages or flight offers?

We have a variety of products in the marketplace already and we will continue to bring out new offers throughout the year.

It is a great year to visit Britain because of the Queen's Golden Jubilee and various other important events such as the Commonwealth Games. British Airways will be launching special fares and holiday packages into the market along with British Airways holidays to promote such events.

What are your views on Malta's tourism sector - incoming and outgoing? What changes do you think should be ushered in for the good of the sector?

This is really a matter for the Maltese Tourism Authority to deal with but, of course, we work closely with them and continuously look at ways to promote Malta as a fabulous place to visit.

We support the tourist board by bringing a number of foreign journalists into the country every year and we feel that we have right kind of flight operation to service the Maltese people and visitors to our country in the right way.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt