Restoring air connectivity crucial to post-coronavirus recovery - Central Bank report

Malta has lost almost half of its air routes in the last year due to the coronavirus, a situation that has sent air travel 15 years back, research carried out by the Central Bank of Malta shows.

Countrywide lockdowns, quarantine restrictions and the fear of contracting COVID-19 saw travel demand tank in 2020 and recovering the lost air connections will be crucial for economic recovery.

The CBM said that in 2005, Malta had 84 direct air connections, increasing to 125 in 2019, largely because of the introduction of low-cost airlines. 

This saw the island directly connected to 40 countries in 2019, up from 27 in 2005, with Libya being the only destination to lose its connection during that period.

The CBM said that COVID-19 dealt air connectivity a “significant blow.” It said over 50 direct connections were lost, with around 70 remaining.

The connections lost include large hubs such as Doha and Dubai, which hindered indirect connectivity offered by the hubs, particularly to Asia and Australia.

The bank said the dip in connectivity has also been mirrored by even greater declines in tourist numbers, with spending by tourists down 90% in July. It said tourist numbers decreased by 60% in August, which is usually the busiest month of the year. 

Recovering air connections

The bank said that it was important these connections are recovered, in order for Malta to benefit from an eventual post-COVID-19 recovery. 

“While COVID-19 has wiped out a significant number of direct connections from Malta, including connections to important hubs, restoring such connections or establishing alternative ones, will be crucial for the economy to benefit from the eventual global recovery in a post-pandemic environment,” the CBM said.

The bank highlighted that air connectivity played a “key role” in facilitating economic development. The bank stressed that policymakers should strive to retain and improve connectivity to large hubs. 

The bank said that the current economic downturn caused by the pandemic was in terms of global air transportation was expected to grow by 5% each year to 2030.