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Matthew Vella
A confidential report requested by government and commissioned by Air Malta on the impact of low-cost carriers (LCCs) on Malta has painted a devastatingly negative picture in which LCCs would dominate the Maltese market and bring with them high risk strains on the Maltese infrastructure.
The report dated 15 June 2006, leaked to MaltaToday has been received very negatively by the Malta Hotels and Restaurants Association's task force on low-cost airlines, accusing the report of being totally biased on a sensitive issue.
Government had asked Air Malta to commission professional auditors to draw up a report on the impact of low cost airlines on the island, a move, hoteliers found unacceptable given the national carrier’s long-standing opposition to low cost.
MHRA’s misgivings at the report are hardly unsurprising. From the outset, Air Malta claims that a 50 per cent increase in visitors in one year is a “high risk” strategy for a self-contained and small destination like Malta, with the advent of the “independently minded” low-cost traveller bringing new strains upon the Maltese infrastructure.
The report, carried out by PricewaterhouseCoopers, paints a picture of a market dominated by LCCs, of hotel accommodation diverted away from tour operator business in favour of LCC traffic, tour operators pulling out of the market, and of one or two LCCs wielding a commercial influence “far higher than that ever enjoyed even by the largest tour operator… By all accounts such a scenario would not be a far-fetched one. Its impacts, as far as displacement on Air Malta is concerned, would be rather more severe than that portrayed in this report.”
According to the report, Air Malta stands to lose Lm23.6 million if Ryanair and easyJet achieve a traffic of 1,540,000 passengers.
Among these high risk strains would be the need for hotels to organise more coach transfers for the arrival of 2 million passengers, and for government to increase public transport routes, and get tourist venues such as the Malta Experience, prehistoric temples and other museums to absorb higher volumes of travellers.
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