Pandemic measures “reversed” Malta’s tourism industry back to 2015, and delays to phase them out had only benefitted competing destinations, according to airport CEO Alan Borg. 

“With the target for the industry being approximately just below two million tourists this year, we’re looking at tourism numbers of circa 2015,” Borg told Times of Malta in an interview.

The airport CEO said the fact low tourism numbers are being reported from Malta’s core markets – the UK and Germany – is a major concern.

“From the UK, airlines have deployed capacity predominantly to Greece, as well as Spain, Tenerife and Portugal. “We weren’t in a position to give them certain guarantees in terms of restrictions and to be honest, with capacity, when airlines don’t see certain trends early on, they’d rather pull out,” Borg said.

Greece and Cyprus had their summer plans laid out by November, he pointed out.

“We are lagging behind [in terms of recovery] and I think that us alleviating restrictions now will not help the capacity we have... There are only a few airlines, that will deploy capacity because of decisions at this late stage,” Borg said.

---

Full interview:

Heading an organisation decimated by COVID-19, Malta International Airport CEO Alan Borg says it is time for the authorities to help reinject confidence among airlines and tourism in general.

CF: Practically all COVID-related restrictions in the community have been lifted. The travel ones have been eased significantly. Are you now confident we are on our way to start seeing much-needed recovery in the sector?

AB: Yes, I think that in the past few weeks we have already seen it. Our numbers for April are already 80 per cent recovered [compared to 2019 figures]. For us working at the airport, it is visibly busier. The terminal is alive.

I think that recovery is now on the way so I would agree with the notion that we are on the path of recovery. The restrictions have been [eased]. Now we are finally aligned with European Union’s requirement. It’s late, but at least we got there.

CF: You recently said you are worried that our recovery rate and projections for, say August, are not similar to those for Greece, which will be exceeding their own numbers. Are you still concerned that come summer, we might still be lagging behind, especially compared to competitors?

AB: As an industry, I think our target for year end is to achieve just below two million tourists, which essentially means we’ve doubled what we had last year. But it also means we’re approximately 30 to 35 per cent below 2019 numbers. Our peers are doing much better. Greece is actually above its 2019 numbers – Portugal, Spain, Croatia, Cyprus, they’re all four or five per cent below 2019 numbers.

So yes, we are lagging behind and I think that alleviating restrictions now will not help the capacity that we have. There is no airline, or there will only be a few airlines, that will deploy capacity because of decisions at this late stage. But what we will see is hopefully increased occupancy on the flights, which obviously will improve the numbers. I think that broadly, the two-million- tourists target should be what we will eventually see at year end. Those are our projections.

CF: So, you still think the restrictions were lifted somewhat too late compared to our peers?

AB: Definitely. The industry plans for summer in November. So, we lost an opportunity when we could not give certainty to the airlines that certain restrictions will be removed by March. We weren’t able to compete with other destinations for capacity and couldn’t give certainty on the restrictions when flying into Malta.

CF: So, while other countries were clear on their plans, Malta always seemed to still be changing things overnight…

AB: The change announced last week to remove the passenger locator form was probably the longest time window we’ve had for a change.

For me, the most challenging one for the industry and it’s not just for MIA but for the industry, was when we were aligned with the European COVID pass in June and we had an overnight change, and we refused all unvaccinated [travellers] overnight.

CF: Last year, you had said you hoped to reach pre-pandemic levels by 2023. Do you still think this is possible, given the changes we’ve seen this year?

AB: I think my projections – although, at the end of the day, projections today are really hard to hold on to – I think the projections were largely there. Obviously, the Ukraine situation wasn’t on the cards and that has a significant impact on connectivity. We’re far away from this war. But at the end of the day, the impact it has on airlines and all the inflation throughout has an impact as well. But generally speaking, I think that 2022 will be circa 65 to 70 per cent of 2019 numbers. I think 2023 will be close enough.

But we need to start working today to make sure the confidence from our airline partners in us maintaining the current regime is there because if we can’t give them the certainty, at the end of the day, capacity will be lost to other mid-range destinations. We need to start working today.

CF: Why are airlines still suddenly stopping travel to destinations just weeks before they would be set to happen? This happened recently with WizzAir and Skopje.

AB: Every week I get updates and there are airlines which are dropping Malta or delaying Malta. The Ukraine situation and other issues means that the costs for the airlines to operate are increasing. If before, a 75 per cent aircraft capacity could make it work, today, if you’re not at 80 to 90 per cent full, it’s not sustainable for you to fly the route. We have seen, and unfortunately, we probably will continue to see these kinds of cancellations.

CF: Do you know which destinations could be dropped next?

AB: It’s hard to list them since things are changing all the time. I think our website is probably the most up-to-date place where people can get schedules. I think generally our core routes, our core markets are stable. But yes, markets like Skopje and maybe others may have tactical cancellations. If there isn’t enough performance on a flight, it’s easier for the airline to rebook you rather than operate the flight.

CF: Have the core markets or popular destinations changed this year? Are we seeing any new markets?

AB: Let’s start with the bad news. I think the bad news is that capacity, schedules from our core markets UK and Germany… we’re far away from where we should be. I think there’s a lot of work that needs to be done by us, by the Malta Tourism Authority and government to make sure this capacity is recouped. Obviously, the UK for us has always been our top market by a wide margin. I’ve been here 15 years and the UK has always been the driver.

CF: And isn’t it this year?

AB: Last year it wasn’t. It was very close to Italy but again last year wasn’t really much. This year, Italy should be number one position and UK will be second. We see some stars… France is delivering very well. Poland is also up, but generally speaking, I would say that if you look at our seats, we are generally 25 per cent below 2019.

Some are significantly up, some of them are significantly down and some are broadly there. I think for me the good news is France is really delivering good performance, Poland as well. With Germany and the UK, we need a lot of work to recover the capacity we lost there.

CF: Aside from COVID, are there other issues that are contributing to the slow recovery rates? Why are we seeing numbers drop from the UK?

AB: If you look at the UK market, last year we were the most vaccinated, we were on the so-called green list earlier on and therefore we delivered good numbers.

Fast-forward to this year and competition is extremely high. There’s a lot of capacity so from the UK, airlines have deployed capacity predominantly to Greece, as well as Spain, Tenerife and Portugal.

CF: Why didn’t they do that for Malta?

AB: On the one hand, we weren’t in a position to give them certain guarantees in terms of restrictions and, to be honest, with capacity, when airlines don’t see certain trends early on, they’d rather pull it out.

CF: Could it be that Malta is not as attractive as it once was? Maybe what used to draw in tourists is no longer there?

AB: Although there’s always room for improvement, and it’s never too late to start improving product Malta, I think Malta still has an appeal.

I’m not saying that airlines aren’t flying to Malta because Malta isn’t appealing anymore. Obviously, there’s room for improvement. When we say that in 2023, we will be close to 2019 numbers and by 2024, we will be there or exceed them, it means I am confident we will recover this capacity but we need to work together as a team and deliver this.

CF: What would be the main areas you would focus on when you say “work together as a team”?

AB: We need to attract airline partners that are strong in the UK, get in discussions with them, give them certain certainties in terms of restrictions especially now and get them to sell Malta just like they did in the past.

They know the numbers are there because the numbers were there. The business case is to an extent, not hard to make, but still needs to be made.

CF: We recently asked Tourism Minister Clayton Bartolo whether he felt tourists are no longer finding Malta attractive and that is why less of them are coming. He said the focus should now be on sustainability and quality, and that all stakeholders should work together. Do you agree with this assessment?

AB: With the target for the industry being approximately just below two million tourists this year, we’re looking at tourism numbers of circa 2015.

So, essentially the industry reversed seven years. If you look at bed stock from 2015 until 2021, the numbers were approximately 20 per cent above those numbers. So essentially, Malta’s capacity for tourists from 2015 to today grew by at least 20 per cent or even more.

So, in my opinion, the long-term goals should be sustainability and aiding the private sector to continue to invest in a better product so that quality tourism can come. But it’s a journey. It’s not something one can implement overnight.

In the immediate, we need to focus on achieving 2019 numbers.

CF: So, you don’t think we’re yet at the point where we can say we have a good thing going, let’s focus on sustaining it and just focus on the quality?

AB: If the industry moved significantly from 2015 to today, and it has, we need to make sure we sustain the economies that have been built around these numbers as soon as possible. This is why there’s this constant 2019 comparison. Even our internal targets are based on that. This gap needs to be rebuilt, as soon as possible. At the end of the day, Malta is limited by infrastructure and size, and shouldn’t go crazy with pushing volumes. But I think it is a top priority for all stakeholders to build back to the volumes of 2019 at the earliest.

I agree with the minister in that we, MIA, apart from being the first and the last experience with every passenger, we have an obligation. We also jointly collaborated with MTA on connecting Malta so I’m putting an onus on myself to make sure we work hand in hand to recover this capacity as soon as possible. But it needs to be recovered, quickly.

CF: In May 2020, you had announced that MIA would be shelving the €100 million expansion plans. Where are you with this and can you give us an indication when you might be in a position to move forward with those plans?

AB: If only I knew! I had announced those plans in January 2020. Basically, the plans we have are still our ultimate master plan. In fact, we will start looking at implementing in small phases, especially operational bottlenecks which we have, and this will happen soon. Apart from that, the company is focusing on two large-scale projects at this point in time.

We have Apron X, which is 100,000 square metres of parking space for aircraft, which we will start later on in the year and have the first phase done by 2024, and completed by 2026. And this will significantly alleviate the capacity we have on the airfield and Skyparks 2.

Skyparks 2 is another large scale project. So we’re talking of 6,000 square metre business hotel, 30,000 square metres of office space. It’s a large project.

The terminal is still our vision ultimately, but obviously COVID-19 and the brunt of what it did to us…

CF: So you don’t yet have any timelines for when we could see the terminal project start?

AB: I announced that in January 2020 [just weeks before COVID-19 hit] so I will stay away from trying again. But definitely, the master plan of the terminal remains there. It’s just about finding the right time both from a financial point of view, as well as from a resources point of view… to implement these in a timely fashion. Clearly, MIA’s commitment on the operational requirements of the terminal remaining there and being paramount will remain. In fact, Apron X is a testament to this.

CF: Aside from Apron X and Skyparks 2, are there any other projects in the pipeline?

AB: We will be announcing and launching a new food court at the airport. We’re bringing some ‘in’ food places. We’re looking forward to opening that in the next month or so. We’re looking at revising the campus, with the relocation of the fuel station, the works are going on right now, and some general improvements. We’ll see some food and beverage stores coming up for extension and us changing, uplifting a bit the feel of the terminal, so we’re always trying to improve.