31 May 2006

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Business Today

MHRA asks banks to finance low-cost revolution

Matthew Vella

The Malta Hotels and Restaurants Association’s task force on low-cost carriers has been in meetings with major local banks to secure a financing package that will entice low cost carriers to Malta by subsidising their landing charges at the airport.
Still at a delicate stage of negotiations, Business Today is informed MHRA delegations met both HSBC and Bank of Valletta chief executives over their initiative to fork out the cash to bring Irish low-cost carrier Ryanair to Malta. Meetings were described as positive by industry sources.
The airline demanded to have discounted landing charges at the Malta International Airport, claiming it would be able to bring some 2 million tourists over the next three years.
Government has however said that any new airline will have to operate on the same playing field as the other airlines at the MIA.
Hoteliers claim the decline in tourist arrivals to Malta can only be stopped by the introduction of low-cost carriers.
MHRA chief executive George Schembri yesterday declined to comment on the state of negotiations between the association and the banks.
Even if they do manage to secure a financial package to subsidise Ryanair’s landing charges, there will still be some horse-trading to settle with the government before the Irish carrier can start landing at Gudja.
But the private financing from hotels is widely believed to be the only way in which companies such as Ryanair, who are claiming they will carry over 2 million travellers to the islands, can effectively hope to set up base in Malta.
Plans to make Sicily part of its Mediterranean network are believed to be Ryanair’s fallback plan if the Maltese option fails.


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