Aid to airlines on some routes

The government will give "established" low-cost airlines an incentive to start operating to Malta while cushioning the impact on Air Malta in a series of initiatives designed to boost tourism.

Support schemes to the tune of Lm1 million will be offered to airlines if they operate to specific destinations during the winter months.

At the same time, the tourism industry's financial contribution to the Malta Tourism Authority will be halved.

"I think these initiatives are a breakthrough for the industry," Tourism Minister Francis Zammit Dimech said last night after the incentives were announced by the government.

The government came under intense pressure from the industry in recent weeks to take concrete action after hoteliers lamented dwindling figures and issued strident calls for the introduction of low-cost airlines to Malta.

However, airlines such as Ryanair deem the landing fees here as too expensive.

The details of the initiatives were unveiled during a meeting between Prime Minister Lawrence Gonzi and the Malta Hotels and Restaurants Association. They were drawn up by the government's core group for tourism, headed by Dr Gonzi and comprising Dr Zammit Dimech, Parliamentary Secretary Tonio Fenech and IT and Investments Minister Austin Gatt, who is responsible for Air Malta.

The support schemes will be offered to airlines for the period November to March in a bid to boost tourism during these traditionally tourism-dry months. Since the EU bars the government from discriminating, the offer is open to all airlines.

At this stage, the government will be "assisting" airlines which fly to the following destinations: Luton (UK), Basel (Switzerland), Girona (Spain), Lisbon (Portugal), Turin and Verona (Italy), Shannon and Cork (Ireland) and Warsaw (Poland).

The government said this initiative should draw airlines that do not operate to Malta, including the big low cost carriers.

The popular low-cost airline Easyjet is based in Luton.

Dr Zammit Dimech explained that it was up to the airlines to decide whether to operate all year round to Malta, but they would not receive support for the rest of the year.

The government believes that through this measure, Malta will benefit from the airlines' renowned publicity campaigns as a "new destination".

The contribution of all tourist operators to the MTA, around Lm500,000, will be halved from next year. Such a measure is meant to provide the operators with the necessary financial injection to take new initiatives.

From next year, the government will increase its contribution to the MTA by Lm500,000, which will be redirected towards new initiatives. Part of the funds will be financed by the Lm600,000 that the government has saved thanks to the MTA's restructuring.

The government insisted it was duty bound to ensure Air Malta remains sustainable. To this effect it has decided to eliminate the airline's Lm300,000 yearly contribution to the MTA. Air Malta's contribution will be reimbursed to May, 2004.

In line with this scheme, the MTA will launch a website through which potential visitors may book their flight, hotel and other services online. In the coming weeks, the authority will be making a call for proposals to have the portal up and running by summer.

The government said the internet had effectively changed the way people book their holiday. In the coming days, the government will be discussing each scheme with the EU to ensure they are in line with the bloc's regulations.

MHRA president Justin Zammit Tabona was sparse in his comments to the press after the meeting but in a statement later, the association said the measures indicated that they will positively assist the promotion of Malta as a tourist destination.

The MHRA acknowledged the reduction of all tourism operators' contributions to the MTA from next year and strongly recommended that all operators use these funds to enhance their marketing efforts.

Air Malta chairman Lawrence Zammit too applauded the measures especially since they specifically target traffic in the shoulder months.

Mr Zammit said his airline intended to continue stamping out inefficiency and attracting new passengers. Suffice it to say that in two and a half years, Air Malta had managed to slash costs by 10 per cent, excluding the cost of fuel.

Despite being absolved of its financial contribution, Mr Zammit made it clear that Air Malta will continue working closely with the MTA.

"The cash injection will provide us with the resources to deal with the impact of any possible new operators," Mr Zammit said, adding that Air Malta would also be exploring other possible destinations.

The Federated Association of Travel and Tourism Agents said the incentives announced come as a welcome and much needed breath of fresh air.

It was indeed very satisfying that the government had chosen to focus the incentives on stimulating incremental tourism business during the winter and shoulder seasons, FATTA said.

"Low cost airlines, which have been the subject of much controversy especially over the past few weeks, should now take up these incentives to translate the promises of volume production into reality."