A report published by the European Parliament suggests that low-cost airline Ryanair could become the dominant airline in Malta and ultimately drive Air Malta out of the market, MEP Alfred Sant said on Thursday.

The study by the European Parliament’s Policy Department titled "The Impact of Unfair Commercial Practices on Competition in the EU Passenger Transport Sector” was carried out for the Committee on Economic and Monetary Affairs (ECON) where Sant sits as a member.

The study aimed at identifying and analysing unfair commercial and trading practices in passenger air transport that are detrimental to consumers and distort competition in the Single Market.  

The report was initiated by Sant through the ECON Competition Working Group that includes MEPs from all political groups who have an interest in competition matters.

In a statement, Sant noted that according to the report, despite mutual cooperation that had marked the relationship between the Air Malta and Ryanair so far, it could not be excluded that the launch of Ryanair subsidiary Malta Air would create a break with the current ‘tied’ market share situation.

The report noted that Ryanair and Air Malta have been competing for the top spot in terms of seat share but henceforth, Ryanair would certainly grow its already sizeable presence in Malta, including gaining access to non-EU markets in North Africa and, as a consequence, potentially becoming the dominant airline in Malta.

Report's findings

The report found that in terms of impact on consumers, Ryanair’s initiative fits into the context of a general trend of air traffic growth all over Europe. The overall increase in aircraft and routes could  lead to a positive outcome by bringing about an improvement in the efficiency of air passenger transport
services. In parallel, it could lead to a decrease in prices due to the upturn in the supply of low-cost flights.

This should have a wide-ranging effect on enhancing Malta’s connectivity and tourism. 

It observed that the new Ryanair subsidiary is intended to offer different routes and networks compared to Air Malta.

But there is no guarantee that the airlines’ two routes will not eventually overlap.

"Moreover, considering that intra-EU transport is critically dominant – accounting for around 92% in the case of Malta – it is possible that the enhancement of the island’s tourist traffic and connectivity will be achieved to the possible detriment of the flag carrier.

"Despite the mutual cooperation that has marked the relationship between the two leading carriers so far, it cannot be excluded that the launch of Malta Air will create a break with the current ‘tied’ market share situation..... From now on, Ryanair will certainly grow its already sizeable presence in Malta, including gaining access to non-EU markets in North Africa. Consequently, the LCC (Ryanair) could potentially become the dominant airline and ultimately drive the Maltese flag carrier out of the market."

Report critical of Air Malta 'no show' rule

In another section, the report was critical of the use of ‘no-show’ clause by Air Malta which prohibits a passenger, who books a return flight and misses the outbound flight, from taking the already paid inbound flight.

But Air Malta argued in a reply to the report's writers that the no-show policy is an accepted IATA standard policy. When passengers purchase a return ticket rather than one-way tickets, the airline reservations system considers the booking as a single ticket for the whole journey. Passengers who inform the airline before the actual flight that they will not be using one of the ticket segments, will, however, have the other segment protected.

Air Malta’s General Conditions of Carriage reads that: "In the event you do not show up for any flight without advising us in advance, we may cancel your return or onward reservations. However, if you do advise us in advance, we will
not cancel your subsequent flight reservations.”