29 March 2006

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Business Today

Air Malta sounds cautionary note over low-cost airlines

Matthew Vella

Air Malta chairman Lawrence Zammit yesterday hoped for a decision on low-cost airlines that will be “in the interest of the whole industry” and not just “part” of the tourism sector, in what could be interpreted as veiled cautionary advice to government.
With urgency on the long-drawn out debate on the introduction of low-cost airlines nearing a final decision by government some time this week, the chairman of the national airline yesterday cautioned government to keep in mind the issue of safeguarding tourism as a whole.
Zammit told Business Today that Air Malta had been updating internal reports on the impact of low-cost airlines, but said it would not be “appropriate” to publish its details.
“It is just like any report dealing with competition. You don’t ask HSBC for its analysis on Bank of Valletta, we wouldn’t want to wash our dirty linen in public.”
The monitoring reports on the impact of low-cost airlines on the national carrier are known to the cabinet and may be the major stumbling block for a final decision to be taken.

Air Malta’s protection is seen by many as the major stumbling block to the entry of low cost airlines into Malta.
Talking to Business Today, a spokesperson for the Office of the Prime Minister yesterday said cabinet will be meeting this week to decide on low cost carriers but he would not be drawn into saying when the meeting would take place.
Tourism Minister Francis Zammit Dimech last Sunday hit back at critics saying he is willing to take full political responsibility for his actions, after hotelier Winston J. Zahra told Business Today the minister must shoulder responsibility.
Zammit Dimech said he agreed a decision had to be taken over low-cost airlines, but hinted at a divided Cabinet over the introduction of cut-price airlines into Malta.
Zammit Dimech was evidently irked by Zahra’s comments, explaining how he had followed Deloitte & Touche’s targets over restructuring at the Malta Tourism Authority by closing down overseas offices as suggested.
Last week hotelier Winston J. Zahra launched a scathing attack on the MTA’s performance during 2005 by outlining a list of missed targets and deadlines for which ultimately the tourism minister must carry the can.
Referring to government procrastination on low cost airlines, the former MHRA president expressed his concern that "while the world is going south by opening up to these airlines and using the web to drive business, Malta is heading north and chasing these airlines away." He said a solution must be found to the current impasse taking into consideration Air Malta and other national airlines currently flying to the islands.


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