No subsidies sought

I note, with some amusement, the comments made by the Minister for Industry, Austin Gatt, when he opened the Amitex Travel exhibitionon Thursday. In case his audience was misled in thinking he was referring to Ryanair when he spoke of a "particular low fare airline" I want to put the record straight.

Firstly, Ryanair does not seek any subsidies or any preferential treatment against any other airline.

The facts are that, as a result of its occupying a monopoly position, the charges at Malta International Airport are between three and four times those of Ryanair's average airport cost throughout Europe and indeed are 2.5 times those at London Stansted Airport.

MIA has little incentive to be efficient and has the safety valve of being able to recoup its annual cost increases with an annual price rise to its customers. Ryanair merely seeks a cost for all airlines at the airport which is more in line with the European average. Under European rules it is not possible to discriminate between airlines who avail of the same level of services or deliver the same number of passengers to an airport but we believe that MIA charges should fall for all airlines that fulfil the same performance criteria, including Air Malta.

Secondly, Air Malta will survive only if it becomes more efficient, regardless of whether Ryanair or any other low cost airline comes to Malta.

It is in competition for the discretionary income of British, German, Italian, Scandinavian and Irish tourists, among others.

Air fares paid by these customers to hundreds of destinations throughout Europe have fallen dramatically in the last few years and neither Malta, as a destination, nor Air Malta as a carrier, will be able to enjoy a premium in the competitive battle for this holiday business. Only a lean and efficient airline offering superb service and low fares will be able to compete in this environment.

Thirdly, Dr Gatt implies that low cost carriers would bring a new "low quality type of tourism". There's no evidence to support this contention at any of the 120 destinations which we already serve throughout Europe.

Indeed, many airports tell us that Ryanair's passengers' average spending at airports exceeds that of high cost airlines by up to 20 per cent and that their ultimate expenditure when they reach their holiday destination is at least equal to, if not more than, that spent by passengers who travel with high cost airlines. It seems obvious to me that they will have much more money to spend in Malta having saved significantly on their airfare.

Dr Gatt's protection of and concern for the status quo would be understandable but for the fact that tourism numbers in Malta have been broadly static for a decade and in reverse mode for the last two years, against a backdrop of double digit growth in many major European markets.

For a country where tourism accounts for over 20 per cent of GNP, loss of market share and, more recently, an accelerating reduction in actual income earned from tourism is extremely damaging to the economy.

This year Ryanair will fly 42 million passengers, an increase of seven million over last year. We have offered to carry a small proportion of these passengers to Malta if the costs at MIA are brought into line with European averages. We seek no subsidies or preferential treatment.

Yes, we are in business to make a profit but if that coincides with a massive beneficial impact on tourism in Malta and on the economy in general on the island, why is Dr Gatt protesting so much?

Mr Cawley is Ryanair's chief operating officer and deputy chief executive.