Creating new synergies

Last FRIday the President of Malta presided over the illumination ceremony of a Christmas tree donated by the government of Lower Austria and placed at the main air terminal car park. Earlier that day, I was taking part in a press conference organised by Malta International Airport to mark the first full year since privatisation brought to Malta a strategic partner from Vienna in the running of our air terminal.

Creating new synergies and networks is a crucial part of the ball game when it comes to tapping new opportunities that face our country on the eve of our membership of the European Union. Such synergies and networks are necessary if we are to exploit new growth potential for our tourism sector.

One of the growth areas that have been identified by the Tourism Ministry is through creating the right synergies between MIA and the cruise liner passenger terminal. Works on the latter are moving ahead of the schedules agreed to by Government and Viset consortium that has been entrusted with this project. By the end of this year we should have had around 400,000 cruise liner visitors - a record.

We do not include this number with that of tourists since we follow the internationally accepted definition of a tourist as a person who at least spends one night in land-based accommodation. If we did add up the number, we would be claiming that tourist arrivals in our country are reaching the one and a half million mark.

Still, although these visitors are not added to figures for tourist arrivals, they do provide a healthy revenue stream. Moreover their presence among us for a few hours offers us a window of opportunity to target them to come back to Malta for a regular holiday. The Malta Tourism Authority is now providing these visitors with a CD-Rom about our country to encourage them to come back.

The synergies that we can create will be more interesting once we manage to promote our grand harbour as a home port rather than merely as a port of call. That would mean that some, even if a few, cruise liners commence and finish their itinerary in Malta. In turn that means that the non Maltese passengers on board will use the services of our international airport and hopefully overnight for a few days in our hotels.

MIA is well aware of this potential and has itself taken up a shareholding in the consortium that is already running the cruise liner passenger business of the country.

Last week I attended the first meeting of a network that Malta Tourism Authority together with, among others, Viset and MIA, has set up to bring together all stakeholders who have an interest in the operations of the cruise liner passenger terminal. That includes the Malta Maritime Authority, Valletta and Floriana councils, the business community, Police, Customs, White Taxis Amalgamated and others who last Wednesday convened at Pinto Wharf precisely to append their signatures to a statute setting up this network.

This is another concrete example of creating new synergies to develop new opportunities in the tourism sector as well as for the country as a whole. The potential is there and it is up to us to be innovative and creative enough to create the suitable vehicles that exploit the opportunities that are available and will be even more manifest as our country joins the European Union on May 1, 2004.

Following the finalisation of the choice of a strategic partner for the MIA by the Privatisation Unit, in July 2002 Government sold 40 per cent of MIA's issued share capital to the Malta Mediterranean Link Consortium Ltd. Another 20 per cent of the shares were then fully subscribed by the public.

The Malta Mediterranean Link Consortium Limited is owned by Flughafen Wien AG (Vienna Airport), the Canadian SNC-Lavalin and Airports Investments Limited.

In May 1990, when I had been appointed Parliamentary Secretary for Transport and Communications, I had seen to the setting up of MIA, and the opening of the airport. MIA was set up from the very beginning as a public company with the possibility that shareholding within it could be eventually offered to strategic partners as well as the general public. The setting up of the company was then deemed as a somewhat revolutionary step since up till that date we were used to the idea that the air terminal should be run by a government department.

The ATD, as the Air Terminal Department used to be referred to in official jargon, needed to be wound up as its functions were transferred to the new company. A period of transition between the two phases was seen to through the setting up of a management committee that anticipated the eventual first board of directors of MIA.

Eleven years later, the privatisation of MIA could take place and last Friday we could have a closer look not only at what has been achieved so far, but even more importantly at what can be further achieved in the future.

In the past 12 years Malta International Airport made great strides in operating the air terminal to the highest standards. The air terminal is the first and last point of contact of the vast majority of tourists that visit our country. The way it is run and managed is one of the more important components of what is largely described as 'product Malta' - the product that we are offering to tourists who visit us and whom we would like to see coming back.

It is very encouraging that MIA is being run in a pro-active manner. The company does not only relate its projections to present-day business operations but plans strategies for the future.

At last Friday's press conference I pointed out that from a tourism perspective, it makes sense that such strategies include creating synergies with the cruise liner base strategy.

The hub concept as it applies to the cruise liner passenger terminal is also applicable directly at the air terminal. There exist opportunities wherein airlines use our airport on their flights from Europe to Africa. Moreover, this is the time for us to take account of the introduction of low-cost traffic.

I am informed that MIA is already in contact with a number of low-cost airlines which are being encouraged to add Malta to their destinations. This is again crucial to our new tourism marketing strategies since Malta cannot afford to be outside of a choice that is becoming more and more of a favourite travelling trend.

I appreciate that Air Malta as our national carrier is itself responding to this challenge and has recently announced the beginning of its own low-cost travelling option between Malta and London.

It is proved around the world that travellers who opt for low-cost airlines use the saved money on accommodation and on enjoying themselves in their holiday destination.

Accession to the EU on May 1 will bring further prosperity to our islands which will definitely be reflected in more passenger and cargo traffic through the airport. The future development of our tourism sector entails the continuous development of our airport terminal facilities.

Malta International Airport Company intends to embark on a 15-year investment programme costing about Lm20 million. This means that the company is aware of the need to develop airport facilities to cater for present and future needs. When privatisation was taking place, it was stated in the 'offering memorandum' that the company will be embarking on this investment programme to enable it to increase traffic movements at the airport and to reach targeted levels of profitability. The same memorandum referred to the level of tourism activity as an important driver of its own profitability.

Just as increased tourism drives the air terminal's own success, the air terminal's proactive development in new spheres of business activity drives the tourism industry further.

That is what creating synergies is all about.

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