Labour: ‘Surrendering Air Malta slots is worrying for tourism’

Labour shadow minister for tourism Gavin Gulia has called for clarifications on plans by Air Malta to cede its slots in major airports, after the airline yesterday insisted it would not be selling any of its slots.

The European Commission today published details of Air Malta's restructuring plan, revealing that the airline wants to create a more cost-effective schedule by terminating certain routes, both loss-making and profitable. These are compensatory measures that must be taken to compensate for state aid, but cutting the loss-making routes will not be considered as a compensatory measure.

This will mean releasing pertinent slots in foreign airports, with Air Malta relinquishing the so called 'grandfather rights' it currently has on slots at London-Gatwick and London-Heathrow, Manchester, Amsterdam, Frankfurt, Geneva, Catania, Stuttgart, and Munich.

The changes in the route network between 2010 and 2013 will reduce overall capacity by 20.2%, apart from reducing the fleet from 12 to 10 aircraft: both aircraft will be sub-leased at cost.

"The discontinuation of certain routes are worrying for the tourism industry. Air Malta is responsible for 50% of incoming tourists, while the rest is provided by low cost carriers and legacy airlines," Gulia said.

"The reduction in profitable routes can reduce capacity, which means less tourists for our industry," the MP said.

Gulia said the fact that the European Commission is expressing doubts on the ways Air Malta will be generating revenues, saving on current operations, and cutting its costs "meant the proposals sent to Brussels were not to the satisfaction of the EC."

Air Malta however yesterday rebutted "allegations" that it is selling slots at primary airports including at London's Heathrow and Gatwick as part of its restructuring plan. "Air Malta's airport slots at primary airports including Heathrow and Gatwick are not for sale," Air Malta chief exective Peter Davies said. "The sale of slots is not even mentioned in the restructuring plan presented to the EU Commission and this option is not being considered. Both destinations continue to be key strategic routes for Air Malta."

The MP said it was clear that there was a lack of consultation between the Malta Tourism Authority and Air Malta, as had been recently stated by both the minister for tourism and MTA chief executive Josef Formosa Gauci.

Gulia also rued the lack of consultation held with the Opposition on the national airline's restructuring. "We were not only not consulted, but also not informed what was happening on the restructuring. My parliamentary questions were met by replies from the finance minister that the information I requested was commercially sensitive."

Gulia remarked that a positive aspect of the EC's official investigation was that it recognised the importance of the airline for a peripheral member state like Malta, which was heavily dependant on the aviation sector.

Air Malta's restructuring plan refers to release of slots at foreign coordinated airports in line with reduced flight capacity and represents additional compensatory measures offered to the benefit of other market participants.

Last summer, one flight rotation to London Heathrow was reduced on the unpopular Saturday evening flight. A double daily service is still however being offered on Heathrow whilst a daily service to Gatwick has remained unchanged.