‘Coronavirus presents opportunity for bold decisions about Air Malta'

As airlines around the world limit their destinations in an effort to mitigate with the impact of the coronavirus on travel, Air Malta has a golden opportunity to fill in the gaps in flight links to Malta, therefore helping the tourism industry to revive, Chamber of SMEs deputy president Philip Fenech has said.

In comments to BusinessToday on Wednesday, Fenech said that, should the national carrier not be in a position to fill this gap due to the issues it has been facing, difficult decisions would have to be taken to ensure Malta did not lose out on the chance to capitalise on other airline's retrenchment plans.

Fenech said that many of the 32 foreign airlines which serve the Maltese airport have been decreasing their flights worldwide, with Malta already hit by a reduction in connections.

While some airlines will continue serving Malta when global travel restrictions are lifted, others will choose to temporarily stop their flights to the island and instead turn to destinations which are more likely to serve their load capacities.

"Some airlines will choose other places to fly to when flight restrictions are lifted, and will only come back to Malta when demand starts growing again," he said, underlining Malta International Airport CEO Alan Borg’s recent warning that tourism would not return to its 2019 figures before at least 2023.

"When Malta switches its tourism sector back on, the island won't have the same international linkages which it previously had. There won't be enough flights operating to Malta to bring in the 2.7 million tourists which were previously visiting the country, and which are needed to maintain business levels in the sector," Fenech said.

Philip Fenech

He pointed out that Air Malta had to thus increase its market share by providing connections to those destinations which were normally served by other airlines. This would be necessary to ensure that tourists are brought to Malta, which in turn would be essential to successfully reignite the engines of the hospitality and catering industries, that would otherwise risk a situation of overcapacity due to the limited local demand.

And, if the national airline is not capable of doing so, the government must take the necessary decisions to ensure tourism is safeguarded, including by considering starting a new company which would replace Air Malta in its current form.

"Due to the burdens Air Malta is carrying, and although a lot of effort has been put in its restructuring, it still isn't efficient enough to act swiftly in this current scenario."

The government, Fenech noted, already had the required structure in place, in the form of Malta MedAir - which owns landing slots and has an operating license - to start airline operations.

Malta MedAir, which was set up in 2018, owns Air Malta's landing rights at major airports.

In July last year, former tourism minister Konrad Mizzi had said that the government-owned Malta MedAir could step in and take over Air Malta's growth plan if issues involving the national carrier are not solved.

"If an airline company is started from scratch, it can have a new, strong and lean cost-base to seize this golden opportunity. This could launch a new Air Malta on a stronger footing, which will not only help the airline itself, but also aid the Maltese economy in general, not least by limiting the excess capacity in hotels, restaurants and the multitude of tourism services, which the country will have to deal with before tourism picks up again."

Fenech suggested that there are different ways of how the government could set up the new company. One could be in partnership with the private sector, namely top tourism industry players, as well as with the public. This would also allow tourism industry insiders with vast experience in the field to lend their support.

Moreover, by making the company publicly listed, the Maltese people would also play a role in backing their country's own airline.

"This is a great chance for Malta's businesses to recover at a faster rate by having a national airline fill in the interim period until tourism completely picks up in 2023. It will also position Air Malta for a good future in the long-term," he added.

Alan Borg

EC’s proposes safe corridors for air travel

Fenech’s comments come as the EU yesterday unveiled a plan to reopen its internal borders.

The European Commission is proposing an approach whereby travel restrictions are lifted in phases, starting with those "between areas or member states with sufficiently similar epidemiological situations."

This would see the creation of "safe corridors" within which people from countries which have managed COVID-19 successfully - such as Malta - can travel to other destinations in which the virus has also been well-controlled.

MIA’s reaction

In comments to BusinessToday following the EC’s announcement, MIA CEO Alan Borg said the company welcomed the European Commission’s guidance to safely resume travel and reboot tourism since it aims to create a common, transparent, and non-discriminatory framework.

“We also agree with the 3-phased approach to lifting the current restrictions in a gradual and cautious manner. We understand that the EC is soon to provide more details, such as the dedicated website with an interactive map,” he said.

“The national public health authorities now need to focus on their country’s respective preparedness to implement the EC’s guidance.”