30 March 2005

The Web

Ryanair: no protectionism, just a level playing field
By James Debono

Fielding questions from The Malta Financial and Business Times, the Department of Information yesterday informed this newspaper that, “All airlines, low cost or otherwise, that are registered in Europe, as is the case with Ryanair, can operate without hindrance to and from Malta immediately. Hence no one is trying to restrict such airlines from operating.”
In apparent bid to appease Air Malta last week, Tourism and Culture Minister Francis Zammit Dimech declared, “We have to take into consideration to what extent the infrastructure can take a possible increase in tourism and what impact budget airlines will have on travel operators and existing airlines operating to Malta.”
The Malta Financial and Business Times asked the Ministry for Tourism and Culture, the Ministry for Investments and Information Technology and the Ministry for Competitiveness and Communications for their respective positions on the operation of low cost airlines to and from Malta and how they would cushion the impact of low-cost airlines on the national airline without resorting to protectionism.
Replying on behalf of the government the DOI told this newspaper, “What is at issue in discussions with Ryanair and other low cost airlines is whether Malta International Airport should offer any discounts on handling charges that so far have not been offered to other airlines, Air Malta included. In this context it makes sense that discounts are only explored with regard to new routes that would be of benefit to our country, rather than on routes where we are already well served. Hence there is no talk at all of any protectionism but if anything; there is talk of maintaining a level playing field in favour of all airlines in line with European competition rules.”
The Malta Financial and Business Times also asked the different ministries about who will be representing the consumer, who is set to benefit from the operation of low cost flights, in the inter-governmental working group on this issue
“An inter-governmental working group is considering all relevant issues and there is no scope of any third party representation at this stage since what is going on is an internal exercise meant to establish the precise technical parameters that would be relevant to future discussions on this issue.”
There have been contrasting views within the Maltese Business Community on this issue. According to GRTU Director General Vince Farrugia, the operation of low cost airlines would result in, “a big injection of tourists in the short-term that will lead to the boost needed by so many sectors of the economy,” Mr Farrugia called on the government to stop inefficiencies in the national airline. “The government either believes in competition or it does not.”
On the other hand, the Federated Association of Travel and Tourism Agents (FATTA) is calling for “careful consideration on the effect that low cost carriers will have on tour operators’ commitments to seat capacity to Malta.” According FATTA such a commitment is already very fragile as it is limited to seats, and it would be relatively easy for leading tour operators to pull out as some have already done in other resort destinations targeted by low cost airlines.

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