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The possibility of low cost airlines like Ryanair flying to Malta is welcome news for the consumer. It is a boost to our tourist industry. Travel to and from Malta has traditionally been dominated by our national airline Air Malta which to date has the lion’s share of the business. Air Malta has run frequent services to many of the major capitals in Europe especially to destinations sending tourists to our shores.
It has operated as a monopoly service, protected from the winds of competition. The arrival of Ryanair risks blowing it all up. In the wake of these developments it is understandable that there is a mixed reaction verging from the enthusiasm of the consumer to the cautious response from Air Malta.
The economic and social impact of such developments must be studied. The question which needs addressing is certainly whether the arrival of low cost airlines will adversely affect Air Malta. At stake is the survival of Air Malta as a result of the introduction of free and open trade following the dismantling of the monopoly.
The controversy takes on pregnant meaning now that we are members of the European Union.
The arrival of low cost airlines will be beneficial for a number of reasons. It will lead to more persons choosing Malta as a destination since the marketing tools of branded carriers will be put to use to promote Malta. The new operators are most likely to open up new travel packages like short weekend breaks to Malta, an ever growing lifestyle pattern. The cost to fly to Malta is likely, with increased competition, to decrease. This should increase demand. Increases in arrival numbers which the country can easily absorb in the winter months, is most likely to give a big boost to our tourism industry. This is of particular importance since tourism is widely believed to be the quickest way to kickstart our economy.
The multiplier effect of tourism is likely to leave more disposable income in people’s pockets. This is essential if spending and consequent growth is to be achieved.
Air Malta’s preoccupation to being exposed to competition is understandable. Regrettably a lot of time dedicated to preparing for membership once Malta lodged its application was wasted. It was a home truth from the day the political decision to apply was taken that the national airline would have a turbulent future. It simply would not be able to compete unless it streamlined its operations by reducing its operational costs, cut waste, fully focused on its core operations and inculcated a culture of accountability. Many of these curing measures have only been taken of late. There is the perception that our airline has been caught on the hop.
The arrival of Ryanair must be seen in the context of our admission to the European Union. The rules of the European Union fully known to us prior to our application is freedom of trade and the breaking up of barriers and frontiers. We appreciate that our airline will have its fair share of troubles. It will lose market share. It will have to start operating under fierce competition. This reality should galvanize both the management and the unions to realise that the company has to be managed differently as the circumstances have changed.
There is no longer room for outdated work practices or for political patronage. If the airline is to pass through this period of turbulence successfully it must strengthen its management team, working under a policy-setting board of directors composed of persons with a nose for business.
The unions must appreciate that times call for tough decisions in the long term interests of the company. The unions too have a direct interest to see our airline overcome this difficult period. All threats of industrial unrest, strikes, sympathy strikes will only be the death knell of the airline that as tax payers we would all want to see flourish. This is a time to be reasonable and forward looking.
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