Consensus over need for low-cost airlines

Malta had to open up to low-cost airlines in order to continue competing in tourism, operators, the government and the Opposition agreed yesterday.

Speaking at a business breakfast organised by The Malta Financial and Business Times, Tourism Minister Francis Zammit Dimech said: "We have to move with the times. Low-fare airlines and internet bookings are reshaping the way the industry works and we would be foolish to play ostrich and bury our head in the sand by pretending that these changes are not taking place.

"The challenge before us is to see how these new players in the frame are going to affect the existing operators...

"It is a challenge that we are taking very seriously. We want to. I would say have to, open up to the low-fare airlines but in doing so we want to ensure that we do not forgo long-term sustainability for short term gains."

Opposition spokesman Evarist Bartolo said that Malta's competitors which were a destination of low-cost airlines had a competitive advantage as tourists found it cheaper to go there. "Are we going to deny ourselves the advantage of having cheaper air travel to Malta," he asked.

Traditional airlines, he said, had to adapt their structures and reduce costs. But although the country could not allow Air Malta to disappear, it could not ignore the reality that only airlines that could compete with low-cost carriers would survive in the years ahead.

Mr Bartolo said the viability of Malta's tourism industry depended on the country's ability to have better and cheaper air travel.

"Even high-spending tourists prefer spending less on the trip by choosing a low-cost airline so that they can then spend the money on hotel accommodation, visiting cultural sites, eating out and entertaining themselves."

The president of the Malta Hotels and Restaurants Association, Justin Zammit Tabona, said the MHRA was in favour of new airlines operating to Malta, "as where these have come in, with or without the national airline, markets have expanded to the benefit of one and all".

He said Air Malta played a key role in the development of tourism to Malta and could still contribute much more to the industry. So due to the fact that there was only one airport, the effect on scheduled airlines had to be given serious consideration.

From the floor, Tony Zahra said: "Whether we like it or not, low cost airlines are here to stay. We cannot keep them away. If we do we'll suffer badly. It is true that Air Malta will suffer but Air Malta has to re-engineer itself or the industry will suffer".

Speaking on the Malta Tourism Authority, Dr Zammit Dimech said this had to become more target driven. A reward and sanction structure would be put in place to act as an incentive to employees.

The MTA's overseas offices would be transformed into what the trade expected them to be - a relentless selling vehicle of Malta to people who mattered in the trade.

Mr Bartolo called for a 10-year strategic plan that would spell out how the country aimed at repositioning the island as not just another sun and sea destination but as islands with a rich cultural and natural heritage.

The government also had to take a strategic initiative to build a coalition with other EU member states to push tourism up the EU agenda. For although 250 EU regulations had a decisive impact on tourism, there was no central strategic vision of a tourism policy at EU level.

Lino Briguglio, who was representing the University of Malta, said it was a fallacy not to sell Malta as a sun and sea destination when the country's major attraction was its climate.

Although Malta had a rich cultural heritage, this attraction should not be exaggerated. For although the country's cultural heritage was indeed an important attraction, the competitive advantage of Mediterranean islands was in sea and sun, so the country's promotion should be based on these factors. The cultural heritage should only be considered as an added bonus.

Prof. Briguglio said Malta was one of the most expensive destinations in the Mediterranean and as a result it did not generally attract very low-income tourists.

He called on the government to liberalise the white taxi service which provided a disservice to tourists. He also said that Malta should be promoted as a very safe tourist destination.

Mr Zammit Tabona said that in terms of tourist numbers, the first two months of this year did not produce good results and an aggregate decrease of 2.4 per cent was recorded over the same period last year.

Although indications were that March would show an increase, the industry was faced with lost ground to make up for in the months ahead.

Booking forecasts from the UK, Malta's major market, were not encouraging and the country had to ensure that all promotion strategies were boosted so as to generate the amount of traffic the country was aiming for.

Mr Zammit Tabona called for a proper branding of Malta as a destination. This, he said, was needed without delay.

He said the time for talking was long overdue and the country needed to act swiftly and effectively to catch up with competitors next door.

Participant Anglu Xuereb too called for less talk and some action. He noted that although he had applied to Mepa for minor changes to be carried out on the Victoria Hotel, in Sliema two years ago, he was still waiting.

As for the Verdala project, he was given partial development permission only after 10-and-a-half years.

Frank Salt said Malta did not have a method of telling the world what was good about it. In the past, Malta was known because of Dom Mintoff; now people did not know Malta at all.

Alternattiva Demokratika chairman Harry Vassallo said Malta should never neglect any of its assets.

Whether tourists visited to see the Grand Master's palace or for entertainment they should return home with a smile feeling they were taking with them whatever it was they had come to Malta for.