Airport CEO says Malta needs a national airline: ‘I hope the Commission agrees’

Malta International Airport CEO Alan Borg says the European Commission’s ruling on state aid for the national airline is a waiting game for the country’s only airport.

Speaking at a press conference on Wednesday, Borg said that the airport’s company forecasts are drafted on the assumption that Air Malta continues to operate with the eight aircraft it has in its fleet.

“It’s a waiting game for us, waiting for the Commission to make its ruling. We keep close contact with Air Malta management, it’s of critical importance. But I do think that Malta should have a home carrier, and I hope the Commission agrees.”

Government filed a formal state aid application in October 2020 in order to provide Air Malta with financial assistance after suffering a major hit during the pandemic.

Air Malta has already benefited from a state aid injection of €200 million back in 2012, and further capital injections from strategic asset sales to the government.

In 2021, Finance Minister Clyde Caruana described Air Malta’s position as a “pitiful state”, losing €170,000 daily.

A year later, he announced a restructuring of the airline that aimed to reduce the company’s workforce by half and outsource its ground-handling operations.

Five-year investment plan

Malta International Airport is set for a €175 million investment over the next five years, which will finally see an expansion of the arrivals terminals and the start of the Skyparks 2 project.

These projects were announced back in 2015, but will start to take shape in the coming years.

Borg said that the company intends on doubling the footprint of the non-Schengen arrivals area while expanding the customs area. The immigration desk will adopt a two-stop process so that the biometrics and fingerprints of arrivals can be taken.

“The experience of arriving passengers should change dramatically,” he said.

He added that works on Apron X started in September. It is now in the excavation process.

Apron X will offer a new aircraft parking area spanning 120,000sqm. It had been billed as the largest investment in aerodrome infrastructure since MIA took over management of the airport in 1998

The airport will undergo a resurfacing of the secondary runway, which will pave the way for a resurfacing of the main runway.

Meanwhile, designs are being finalised for a covered walkway connecting the Park East car park to the airport terminal.

The arrivals hall is looking to be renovated, Borg said, with the company looking into the idea of having a traditional cafeteria in the hall to give passengers a ‘Mediterranean feel’ as soon as they step out of the airport.

The departures hall will also be renovated, with grab-and-go concept shops to make space for more check-in desks.

The company is also in the process of finalising a new fuel station to make way for the SkyParks 2 project. Borg said that the company has issued calls for the development of the project.

“This is a huge task. We’re talking about a development that’s three times the size of the first SkyParks project.”

He added that the Cargo Village project should be contracted by end of year, with 1,100 sqm remaining in the project’s development.

Borg also said that the VIP terminal is due for an upgrade, ideally into a six-star development that can accommodate larger delegations of high-level personnel.

Current challenges

Borg said that the airport was lucky to avoid some of the major staff shortages and operational constraints faced in other European airports. However, the landscape is still a challenging one, industrial actions abroad impacting local operations nonetheless.

He also said that there is still the possibility of worsening macro-economic and geopolitical factors, noting the war in Ukraine as a particular concern that could impact demand.

Uncertainty posed by these factors, coupled with cost increases, could affect consumer confidence, booking windows, and medium-term visibility for airlines.

And while 2022 was a good year for airport traffic, the pent-up demand for travel after the pandemic is expected to level off into 2023/

“People will be smarter in their decisions,” he said. “Occupancies will unlikely surpass 2022 levels.”

Carlo Micallef, CEO of the Malta Tourism Authority, said that the airport saw impressive seat load factors in 2022, often above 90%.

He said this is an indicator of high demand to visit the country, and that people are willing to spend more to come to Malta.

“The cost of flights to Malta was quite high at one point. This shows visitors to Malta are looking for the experience.”

He insisted that Malta should compete in tourism on quality, rather than price.