A total 5.8 million passengers passed through Malta airport's gates in 2022, reaching some 80% of pre-pandemic levels.

MIA CEO Alan Borg gave an overview of the airport’s performance on Wednesday, when he also announced a five-year €175 million investment in planned projects.

Despite a slow start to the year, recovery quickly picked up as COVID-19 restrictions were eased completely, with performance peaking in 2022's fourth quarter.

The airport was connected to 36 markets through 31 airlines operating 107 routes, Borg said, with recovery in Malta’s primary markets somewhat of a mixed bag.

Italy cornered the most significant chunk of travel to Malta, accounting for 23% of passengers with performance being 9% lower than 2019 levels.

The UK and German markets, which represent 18% and 10% of the market share respectively, were not as quick to recover with the performance of each being 38% lower than in 2019.

On the other hand, Borg said, some smaller markets experienced very encouraging growth, with France taking a 10% share of the market, an increase of 26% on its 2019 levels and Poland cornering another 5%, representing a 34% increase since before the pandemic.

The highest share of passengers came from London Gatwick Airport (5%), followed by Catania (4%), Frankfurt (4%), London Heathrow (4%) and Munich (4%) although all of these barring Heathrow experienced a drop in market share since 2019.

Borg explained that the loss in these core markets is most likely due to a lack of seat capacity and airlines playing catchup in reclaiming dropped routes, with a number of regional airports yet to re-establish connections to Malta.

Ryanair was the airline that cornered most of the market share of Malta’s airport, carrying 45% of all passengers, followed by Air Malta at 26%, Lufthansa at 5%, Easy Jet at 5% and Wizz Air at 5%.

Air Malta experienced a drop of 28% in market share since 2019, with Borg noting that while, prior to the pandemic, the national airline had been operating with 11 aircraft, it was now down to eight.

Overall, 59% of Malta’s seat capacity came from low-cost airlines.

When compared to other southern European destinations, Malta was outperformed by Greece (98%), Portugal (94%), Spain (88%), Turkey (87%), Italy (82%) and Cyprus (80%), with Borg noting that Greece, Portugal and Spain also have a strong market for internal tourism.

He said that presently, figures indicate that Malta is on track to stay on par with Cyprus in 2023. 

Five-year investment plan

Turning to MIA’s ambitious plans for expansion, Borg said that the airport is on track to invest €175 million over the next five years, with some 25% or around €40 million expected to kick off this year.

This includes phase one of a planned terminal expansion and planned alterations for the arrivals area to accommodate additional passenger control requirements expected to come into play next year.

The entry requirements for non-Schengen arrivals are set to become more stringent, Borg explained, with third-country nationals expected to provide a biometric of their face as well as a fingerprint, a process that is going to require more space to manage.

The baggage reclaim area is also set to increase from six carriages to eight, with these projects expected to start between the first half of the year and the last quarter.

Other investments include a planned upgrade of the customs area as well as the construction of Apron X.

Works on the apron have already begun and are now in the excavation process, Borg said, with the project expected to accommodate seven additional aircraft and three new stands which will be in operation by 2024.

MIA also plans on gradually doing resurfacing works to both of its runways, starting with the secondary runway and then the main runway, which is expected to be completed in the next three to four years.

Other upgrades include plans for a covered walkway between the terminal and the car park, new outlets as well as a new coffee shop in arrivals, a €2 million digital infrastructure upgrade, a new photovoltaic farm, a new heating, ventilation and air conditioning system as well as LED lighting upgrades.

When it comes to new retail and property investment, the airport is currently working on plans to relocate the fuel station to make space for Skyparks 2, with works on the planned business centre expected to start by the end of the year.

Borg said that following a call for applications, a winning bidder had been chosen to operate the 90-room hotel planned for Skyparks 2 and that the international hotel brand selected is expected to be announced later this year.

He said there are also plans to overhaul the VIP terminal and turn it into a “six-star development”. 

Fuel tax could pose challenge to Malta’s competitiveness 

Asked by Times of Malta whether the imposition of a tax on aviation fuel will affect Malta, Borg said that this could pose a challenge to the country as a destination, with the cost having to be reflected in the airfare.

The European Commission has plans to introduce an EU-wide tax on aviation kerosene as part of the "Fit for 55" package, a wide-sweeping decarbonisation effort aimed to reduce carbon emissions.

The tax is expected to come into effect once the legislation is approved, sometime this year, and gradually increase over a 10-year period, applying only to intra-European flights.

“There are of course challenges, I think the regulation as proposed is unfair towards smaller states on the periphery of Europe,” Borg said.

“Smaller, internal traffic is set to take the brunt of this while long haul traffic that leaves states like Germany, for example, is exempt.”

This could see Malta take a hit in competitiveness, he said.

“As it is being suggested, the tax could total up to 10% of the average fair price today, so if let's say you are a family of four, it is quite a jump in price,” Borg said.

“We are also not as close to primary markets as we may think, three-and-a-half hours from the UK, two hours from Germany,” he continued.

“This is of concern and will put more pressure on Malta’s elasticity, the country being primarily a leisure destination.” 

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