Last updated: 05:00 PM ET, Thu March 19 2015

Air Malta Seeks a U.S. Partner

Airlines & Airports | James Ruggia | March 19, 2015

Air Malta Seeks a U.S. Partner

Last Friday (March 13) Air Malta unveiled its summer schedule of 160 weekly flights. Between March 29 and Oct. 24, the airline expects to carry 1.2 million passengers. This summer, Air Malta will operate direct-scheduled flights to 26 European gateways that are the backbone of its business.

Though the short-haul European business makes up most of the airline’s business, it’s never a good idea to maintain a narrow portfolio. Like Malta itself, which receives 1.6 million annual arrivals, the airline would like to expand into markets that are more likely to travel in the shoulder seasons. As a national flag carrier, Air Malta is vital to the identity of the country and to its sense of sovereignty.

When RyanAir’s Chief Commercial Officer, David O’Brien was widely quoted recently saying, “In the aviation game, if you’re not growing, you’re in trouble and if you’re not reducing your costs, you’re also in trouble. I don’t see Air Malta doing either,” it was viewed by many in Malta as an assault on the country itself. The Times of Malta called the comment, “arrogant,” in a story written to rally the airline’s labor force and its leadership.

But it’s not just pride — no country wants its connectivity in the hands of foreigners as the island of Cyprus now finds itself. The ghost of the recently collapsed Cyprus Airways is haunting the Maltese and providing a real sense of urgency. Cyprus and its former flag carrier faced a similar complex of challenges as Malta and Air Malta do now. As a European regional carrier, Air Malta is overly exposed to competition from low cost carriers like RyanAir because those carriers are so popular with the short-haul sun-and-fun tourists that fly into Malta from European gateways. On Monday (March 16) Air Malta began a restructuring that was imposed by the European Union, a body that regards the very notion of a flag carrier as an anachronism.

Last year, Air Malta lost €16 million mostly because of competition from low-cost carriers like RyanAir. “We were losing money and we needed to cut costs,” said Joseph Galea, the airline’s deputy chief commercial officer. In recent months things have improved somewhat mostly because of the drop in oil prices, but a longer-term solution could be found if Air Malta can strike a deal with a U.S. carrier. “We are looking to create an alliance with an American carrier that serves key U.S. cities. For us, the U.S. is all about potential. It means a market that isn’t so focused in July and August.”

Air Malta current routes offers direct service to Amsterdam, Athens, Berlin, Brussels, Budapest, Catania, Düsseldorf, Djerba, Frankfurt, Geneva, Hamburg, London (Gatwick and Heathrow), Lyon, Manchester, Marseille, Milan, Moscow Domodedovo, Munich, Paris (Charles De Gaulle and Orly), Prague, Rome, Venice, Vienna and Zurich. An American alliance would add many more gateways and the flight times could be coordinated along with a seamless transference of luggage.

The EU restructuring dictates that Air Malta must break even by next year. A strategic partner would greatly enhance that possibility. Though Europe will remain Air Malta’s core market, an American carrier would also create a more seamless journey from the U.S. into Malta. That would greatly increase the meagre 22,000 U.S. arrivals the island nation is getting now. More American tourists could also spread the season into the shoulders. “Seasonality spread is a tough challenge,” said Galea. “We are creating events for January and February, but ultimately we need unique reasons to come to Malta.”

After years of silence in the U.S. market, the Maltese Tourism Authority (MTA) has returned with a mission to stimulate an American market that could address important deficiencies in its tourism now. Spearheaded by Michelle Buttigieg, its representative in the U.S., the MTA hopes to stoke the fires of interest as it heads to the year 2018 when its capital, Valletta, becomes a European Capital of Culture. The Maltese are hoping that Valletta’s big year will get the message out beyond Europe to the long-haul markets that the country has much more going for it than the beaches that its short-haul markets in Europe are so focused on.       

The airline is among the MTA’s largest private Maltese partners. The MTA needs to build up awareness in the U.S. “Consumer awareness is very low and so is agent awareness,” said Buttigieg. “We don’t have the big budget to go after the mass market tourist in the U.S. and anyway we get that from our European markets. In the U.S. we are looking for high end travelers.” In order to educate both groups the MTA began operating the Malta Specialist Program with Travel Agent Academy, a division of Travalliance, the publisher of TravelPulse.

So what is the destination’s proposition to long haul travelers from the United States? Why would American tourists go to the trouble of visiting Malta, a destination without a direct air connection? It’s definitely not for everyone, but it should be of keen interest to people interested in history, spirituality (New Age), prehistoric sites, Mediterranean lifestyle and yes, a great destination for beach holidays. Malta can also count on attracting those travelers looking for the unknown destination. The paradox for Malta is that it’s on the edge of European tourism, but at the center of European history.

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