8 JANUARY 2003

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From Vienna with love

Kurt Sansone catches up with Malta International Airport CEO Peter Bolech and discovers that a number of changes are in store to turn Malta into an airline hub

With a CV that boasts the vice presidency of both Vienna airport and Austrian airlines, at the age of 50, it’s a fresh start for Malta International Airport’s new CEO Peter Bolech.

Two things strike me when I enter Mr Bolech’s office at the airport: his amicable attitude and the breathtaking view of the runway from the office bay window.

We sit down. Formalities over I ask the obvious question: why did Vienna airport decide to invest in Malta in the first place?

"It’s Vienna airport’s general policy to search for foreign investment that has a cultural fit," Mr Bolech says. He explains that the first evaluation made by the Malta Mediterranean Link Consortium, which included Vienna Airport, showed that Malta’s geopolitical and geo-economic background was very similar to that of Vienna.

The CEO continues, "The second stage of the evaluation process showed us that MIA was well-managed and I must say that it is one of the few airport organisations that does not require major restructuring. That made it all the more interesting for us."

He goes on to praise the airport’s employees for showing trust in the new set up. "When MML became shareholders the employees had the option of taking up government employment but they opted to stay and this gave us confidence."

Mr Bolech holds words of praise for the airport operations undertaken by MIA, which he describes as "very good by international standards."

Despite the good reviews the CEO gives about MIA, I cannot help but ask what changes are in store for the airport company. Surely a consortium that decides to invest does so with the aim of taking that investment to new heights.

"We must become more active in identifying business opportunities," Mr Bolech says. I ask him about the hub concept that MIA intends to develop. The CEO pauses for a moment. "The airport alone cannot develop into a hub without the co-operation of the domestic carrier. With Air Malta we can develop a faster baggage and passenger throughput as well as widen the passenger catchment area initially to Sicily, southern Italy and North Africa."

He then draws parallels with Vienna airport. "During the Cold War, Vienna, being the capital of a neutral country, made it easier for Austrian Airlines to tap the eastern European routes. As a consequence Vienna airport became the major West-East hub."

Nowadays, Vienna Airport is still a major hub but it has transformed, to cater for non-direct flights. Mr Bolech argues that MIA could tap the East-West routes.

I press him for more details on the work that has already started. "The cruise and fly concept is our first step in that direction. Cruises are increasing and we want to convince cruise operators to use Malta as a turnaround port, not just a port of call."

Mr Bolech says that the cruise-air combination is not an obvious one because there are a lot of logistical challenges that need to be met. "Our 10 per cent share in Viset (the consortium developing the Valletta Cruise Liner Terminal) signifies our interest in developing this line of business. We are also working with the Malta Tourism Authority to be able to develop market strategies that cater for this line of business."

The company is currently in the process of re-considering its mission statement. Once that is in place the strategy to reach the aim can then be outlined in detail.

"We have adopted a bottom-up approach with a number of working groups headed by experienced people from Vienna airport coming up with ideas and strategies. The company is developing its own future and managers, non-managers, and representatives unions are involved in the process."

Mr Bolech explains that this work will be concluded by the second half of this year. "We might need a new management structure but I must stress that we are not going to make people redundant at least for the next five years."

I query whether there is room for change in a number of work practices. "There is still room for flexibility, such as offering employees the option to work part-time. Funnily enough I found the unions saying that this was their idea and that is good for the company and of benefit to the employees."

The Austrian is enthusiastic about the whole project and while acknowledging that certain things such as flexi-time are easier to achieve, it is more difficult to create a hub. "All I can promise is to work in this direction," Mr Bolech says.

Given the large stake MML has in the company I ask whether MIA will see an influx of foreign workers. "We will bring in the best people to tap their know-how but indeed I may be the only expatriate."

He says that since MML became a strategic partner it has been the philosophy of the company to retain MIA’s Maltese character.

How does Mr Bolech envisage MIA in ten years’ time?

"Let us not get carried away with grand ideas but MIA can easily develop into a regional hub such as Basle and Nice, which are regional hubs that have outgrown their domestic demands."

The obvious question crops up. Does MIA have the adequate infrastructure to cater for a hub?

"The capacity is there. MIA has two runways similar to Vienna. The terminal building has the capacity to cater for double the current capacity and if need be there is much land in the vicinity that we can develop. However, all over Europe, extending infrastructure in current circumstances is difficult," Mr Bolech answers while sipping a cup of tea that had just been brought in by his secretary.

I bring up the subject of Air Malta and its monopoly. It is a known fact that there exists friction between the national airline and MIA.

Mr Bolech diplomatically brushes aside the difficulties. His personal background, having served at Austrian Airlines, also a monopoly for many years’ and Vienna Airport gives him an advantage.

"We can best achieve results when we work closely with the airlines. I have approached the chairman and CEO at Air Malta to discuss the benefits of closer co-operation. I must say that the management of both sides are willing to work together when need be."

Being an outsider to Maltese politics, the CEO treads carefully when I ask him whether EU membership is of benefit to MIA. "The MML consortium is of the opinion that accession to the EU is good but we are ready to live with the risk of non-membership."

I press him on the issue but he remains understandably cautious. "An advantage that could benefit Malta is the liberalisation that is at the forefront of the EU’s philosophy," Mr Bolech remarks.

The discussion turns to the recent news that Austrian Airlines is now operating flights from Malta. "It is positive," he remarks. Mr Bolech adds, "even the decisions taken by British Airways and Emirates to increase their flights indicate that these airlines have confidence in us."

He explains that passenger figures are also going up, giving rise to the hope that there is the right climate for moderate growth. "The worst seems to be over and we are looking ahead to more favourable traffic results," Mr Bolech says.

Talking to an airport CEO I cannot help but bring up the tragic 11 September events and their consequences. Mr Bolech interjects: "It has changed the outlook of everyone in the industry. It also showed how sensitive the business is."

The terrorist attacks have had people focus their energies on security. Mr Bolech says that MIA has a 100 per cent baggage screening system, which is above average. "But airports are just one target for attacks, if one were to imagine what could be done the possibilities are interminable," the CEO remarks.

How does Mr Bolech interpret the success of the share issue last year?

"It gives me courage to see the share issue taken up so fast. It is a sign that the public sees investing in MIA as worth it."

Mr Bolech has a tall order on his plate and with six months of his three-year term already over, he understands that the changes that have to occur at MIA need to happen now. In his own words: "Let us begin today because if we start tomorrow that means one day less."


Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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