Government’s one share - and veto - in Malta Air guarantees Ryanair’s commitment to Malta

Tourism Minister Konrad Mizzi said the new airline has very significant growth potential and will be guaranteeing the sustainability of tourism in Malta for the next decade

Tourism Minister Konrad Mizzi said that the one share retained in Malta Air retained by the Maltese government would guarantee Ryanair's investment in Malta
Tourism Minister Konrad Mizzi said that the one share retained in Malta Air retained by the Maltese government would guarantee Ryanair's investment in Malta

The Maltese government fought hard to convince Ryanair’s Michael O’Leary to give it a share - with veto rights - in Malta Air, Ryanair’s new Malta subsidiary.

In an interview to air on discussion programme Xtra tonight, Tourism minister Konrad Mizzi confirmed that the veto right that came with the one share the government was granted was crucial to ensure Ryanair did not leave Malta anytime soon.

Mizzi also rebutted claims that the new airline would ruin Air Malta, the national airline, citing the growth of AerLingus following the setting up of Ryanair, as proof.

Mizzi said that Malta Air has some very significant growth potential and will be guaranteeing the sustainability of tourism to Malta for the next decade.

“We currently have 61 Ryanair routes operating from Malta. But the airline might have one day decided to leave due to opportunity costs,” Mizzi highlighted, “But we are now tying them to Malta and assuring tourism sustainability not for one or two years, but for the next ten years.”

Mizzi said that the multiplier effects emanating from the establishment of Malta Air in Malta will be “enormous”.

“The growth will be out of this world. From 61 routes we can increase up to 120 routes, providing strong access to Malta from different countries,” he said.

Malta Air will see the six planes and 61 Ryanair routes served from Malta transferred to it.

The agreement with the government requires that, over the course of three years, the number of planes be increased to 10, with an accompanying increase in routes.

Moreover, Malta Air’s workers will be based in Malta and pay tax locally, and a head office will be established on the island, employing around 350 people.

The agreement also provides that Ryan Air transfer around 50 planes registered elsewhere in Europe to Malta Air, and that the company invest about €1 billion in infrastructure and airplanes in Malta.

The minister said that the establishment of Malta Air in Malta is advantageous for the government because it will have “a golden share” in the airline, which translates as a barrier preventing the carrier from transferring its plane operations to other countries.

“What the government did is guarantee the future of tourism sustainability. What would the consequences be were Ryanair to leave? In the past we used to ask what would happen if ST Microelectronics left. But the biggest problem we would have today is if Ryanair left Malta, because half the tourism industry depended on that airline,” Mizzi underlined.

He said that, each year, Malta Air would be injecting €50 million into the country’s economy in salaries and services.

Mizzi underscored that the island’s national carrier, Air Malta, would remain important for Malta, and would compliment Malta Air.

Moreover, the two airlines will offer a different service, with Air Malta being a low cost carrier flying to several different European destinations, and Air Malta being more of a business airline, with a focus not only on Europe, but also the Middle East, Africa and India – destinations which Malta Air won’t cater for.

“Air Malta is offering a different service. Ryanair and Malta Air are low-cost carriers that serve several different destinations. Air Malta will focus on the main airports for those who want to use them,” he said.

“It will also focus on Europe, the Middle East, Africa and India, which India isn’t focusing on. Next year, Air Malta could start flying to Accra in Ghana, and we also wish to fly to Mumbai, India.”

“These routes require more resources, a business class product, cargo space and other things which Malta Air won’t offer,” Mizzi emphasised, “Malta Air is more of a leisure airline, while Air Malta is more of a business airline. But with both together, we can create a regional hub in Malta.”

Mizzi went on to rebuff possible concerns that the new airline could lead drain engineering talent from Air Malta.

He said Malta Air would mostly be offering employment opportunities to pilots and crew, including to Maltese pilots living abroad who are interested in returning to Malta.

“Malta Air will be mostly employing people in cabin crew and pilot roles. There are many Maltese people who want to work in this sector. I receive about six or seven emails a week from Maltese pilots living abroad who want to return to Malta to work with Air Malta,” Mizzi noted.

“This will be an opportunity for them to work as pilots in Malta, and they can reach the level of captain quicker. The situation is the same when it comes to cabin crew. I’m sure Malta Air will have mixed human resources, both Maltese and foreigners,” he said.

Mizzi, however, acknowledged that there was a problem of finding people with technical skills in Malta’s aviation sector, and said more work needed to be done to up-skill the local human resources.

“This is a well-paying sector. I think that if we put in place good apprenticeships programs, young Maltese people can [find jobs in this sector], which offers good salaries,” he said.

More in Business