MHRA ‘left in the dark’ on Air Malta reform process

Speaking at a conference releasing the BOV MHRA Survey for the third quarter of 2010, Micallef said that although the performance registered in the summer 2010 is a “feather in the cap” of all those who championed the cause of increased seat capacity from underserved routes, there is still further effort required to secure a level of profitable performance.

“The strong performances from Italy, Spain and Scandinavia have clearly been a primary contributory factor to the recovery and have made up for the weak performance from the German market, which continues to prove to be very challenging.”

Profitability in the third quarter has increased over the second quarter however still falls 15% short of 2008 levels. This can mainly be attributed to the increase in utility bills that has substantially increased hotel overheads, which has eroded up to 24% of revenue gains registered, he said.

Though NSO reports indicate that tourist expenditure has continued to increase, hotel average rates remain below 2008 levels indicating that the increased expenditure is filtering down to other operators. Micallef calls for a more detailed analysis to be conducted as to where the expenditure is being made.

Though MHRA are supportive of any decisions taken to ensure the future viability of Air Malta, Micallef says he is “frustrated about being kept in the dark regarding developments of the airline’s reform.”

“MHRA have refrained from saying how Air Malta should be run, however we expect to be kept abreast with developments."

“Air Malta’s decision to cancel 38,000 seats was taken 9 weeks ago and to date we have not even recovered one single seat.”

He is concerned about the time issue in that the tourism industry cannot afford to wait as seats for next summer’s season are already being lost as tour operators may decide to promote other destinations due to lack of capacity.

Air Malta’s claim to be transferring seats out of UK to other destinations is a “bold statement” and Micallef challenges the possibility of redirecting 40,000 seats. “Even if this happens it makes no sense to throw away existing customers in the hope of finding new ones.

“When one considers the significant impact the increase of around 125,000 tourist arrivals has had on the industry this year it is easy to be concerned.”

Speaking during question time MTA CEO Josef Formosa Gauci said that a number of meeting have been held with Air Malta to ensure that as little capacity is lost as possible due to the problems being faced by the national carrier.

He also said that meeting have been taking place with other carriers that may pick up the slack if Air Malta cannot. However, he ensured that no decisions would be taken before the Air Malta’s future was secured as it is important that decisions are taken that could be the “last straw” for the airline, which is of vital importance for the Maltese tourist industry.