Landing charges 'not real obstacle' to low-cost airlines

Contrary to claims, Malta International Airport's landing charges are not the real obstacle to low-cost carriers hitting the Maltese market, according to an MIA report circulated among stakeholders and seen by The Times.

In the report, which has so far not been published, the company says that its aircraft landing charges are among the least costly in Europe and cheaper than many other airports, used by leading low-cost carriers, in Spain, Amsterdam and Slovenia, for example.

The report was drawn up in view of the controversy regarding the relationship between low-cost carriers that may consider Malta a potential destination and MIA.

It seems the aim behind the report is for MIA to dispel misconceptions on its competitiveness and any erroneous understanding that it is, in any way, impeding low-cost carriers from including Malta on their list of destinations.

On the contrary, in line with its objectives, MIA insists it pursues in its effort to attract more airlines to operate in Malta - an exercise that complements further the support the company affords the tourism industry to increase tourist arrivals.

The report says that the only other tolls, apart from landing charges, collected from airlines by MIA are the passenger service charge and the security charge, which together amount to Lm7.57.

According to data applicable to foremost destinations currently served by Ryanair, one of the leading players among the low-cost carriers, MIA charges are still comparable to other airports used by low-cost carriers. The problem is that the consumer still confuses issues, such as the origins of other taxes, including the Lm20 government tax on each ticket, the report argues.

Furthermore, the adherence to EU regulations now compels the abolishment of any monopoly in favour of healthy competition, meaning, for example, that Air Malta and Servisair Globeground operate alongside each other as ground handlers on a level playing field.

They must also retrieve their operational costs in the form of charges, which also constitute a considerable share of the expense incurred by the airlines, MIA points out.

The report adds that, in some countries to which low-cost airlines operate, private stakeholders have formed a conglomerate, whereby each entity contributes towards the funding of the launch of the low-cost carrier operation in return for featuring exclusively on the same carrier's website.

It is such contributions, coupled with substantial reductions of landing and passenger charges, which normally clinch the deal for low-cost carriers, the report concludes.