Air Malta targets low-cost market

Air Malta has launched a new low-cost, no-frills service to and from London Stansted Airport, with one-way prices starting from as little as Lm23 excluding tax.

Air Malta chairman Lawrence Zammit said the service, branded as Fare 4U, is the beginning of a new strategy by the national airline to penetrate the low-cost market.

The airline will also start reaping the fruit of EU membership as from the second day of Malta's accession. On May 2 of next year the group will launch a "first" for Air Malta, operating direct scheduled flights between Catania and London Gatwick. This type of service can only be operated in a EU membership scenario.

Mr Zammit also confirmed reports in the media that Air Malta's losses for the last financial year will amount to Lm16 million. "We will soon be announcing the official audited figures. If anything, the situation could be worse."

He also confirmed that the group was expecting its first Airbus aircraft of its new fleet in January.

Mr Zammit said that, given the right results, Fare 4U could be extended to other destinations. "This will allow our passengers to share with the airline the new opportunities that arise."

He said the airline has been noticing the development of the low-cost market and decided that time was ripe to go for this new challenge.

Addressing a press conference at the airline headquarters, Mr Zammit, accompanied by the group chief operational officer Joe Cappello, stressed this was only the beginning of Air Malta's operations in the low-cost, no-frills sector of the industry.

The airline had examined its new opportunities, as well as its new threats, and the exercise had persuaded it to infiltrate the budget market.

Fare 4U to London Stansted will be operated from March 29 of next year every Monday, Wednesday and Friday, departing Malta at 9 p.m. Seats will be on sale in Malta, the UK and from the entire Air Malta network from December 8.

Mr Zammit said the one-way prices will start from an incredibly low rate of Lm23, excluding tax. "This one-way price structure, which is similar to the way other international low-cost carriers operate, will allow our customers a greater amount of flexibility. Food and beverages on board Fare 4U designated flights will be available for sale."

He said the cost of the air ticket will fluctuate according to the demand.

"We decided to start operating the low-cost service not only as a reaction to increased market demand but also as a result of the airline's real need to increase revenue and passenger numbers. This service, which will be promoted at significantly lower prices than normally available on the market, should stimulate incoming tourism to Malta as well as give an opportunity to Maltese travellers to visit the UK more often."

Mr Zammit said that at this critical stage in the airline's development, it was imperative for Air Malta to take stock of the situation and reorganise the way it operates its business.

Mr Zammit also explained why the airline chose London Stansted as a destination. "Stansted is the fastest growing major airport in Europe and is the fourth busiest airport in the UK. A Lm36 million extension to the terminal building was completed in April of last year. The airport caters for extended hours of operations and is the main hub of low-cost airlines.

Air Malta commenced scheduled operations to Stansted in May 1999.

Mr Zammit also announced a new three-times a week service between Catania and London Gatwick. The price will be in the region of €75 and €150, including full service.

Tickets on the Catania-Gatwick route will be on sale in Malta, the UK and Sicily as from December 8.

Air Malta has operated scheduled services to Sicily for a number of years and has always viewed the Sicilian market as a natural extension of Malta's small domestic market. The decision to fly between Catania and London was taken due to the potential of both markets.

"The flights, which will depart from Malta every Tuesday, Friday and Sunday morning, will stop in Catania where passengers will embark or disembark. The flight will then leave Catania, bound for Gatwick airport. The return flight will also stop in Catania on its way to Malta. The first flight from Catania to Gatwick is due to operate on May 2 of 2004. Obviously, Air Malta can only operate this flight because of the new scenario of EU membership," Mr Zammit explained.

As of May 1 next year, Air Malta will be allowed to carry revenue-generating passengers between the EU countries - without the passengers having to start or end their journey in Malta.

"Not only is Air Malta providing a direct air link between Sicily and the UK, thereby facilitating travel between the two destinations but it is also providing UK and Malta based clients with the possibility of enjoying two-centre holidays."

Mr Zammit said the success of the service was extremely important for the group as an EU airline. "This would determine the feasibility of similar opportunities that the airline could exploit in the future."

He said Air Malta needed to exploit any opportunity that could lead to increased revenue without incurring higher costs.

"The airline can only continue to survive if the company's commercial goals are achieved," Mr Zammit concluded.