Air Malta’s suppliers ‘have to pull their weight’

Finance Minister Tonio Fenech yesterday shrugged off the advice given by Ryanair to fire the consultants working to save Air Malta, the national airline.

“I don’t think we need to take Ryanair’s advice to run Air Malta,” Mr Fenech said, adding he did not feel he should have to respond to each comment the low-cost carrier’s representatives made.

Ryanair deputy CEO Michael Cawley recently accused Ernst & Young of unfairly blaming Air Malta’s troubles on low-cost carriers, adding that the government should fire them and should not pay a fee “for that rubbish”. Mr Cawley said Ryanair did not compete with Air Malta and operated on completely different routes, bringing new tourists to the island.

Mr Fenech said Air Malta had a multitude of problems but it was “a fact” that Maltese tourists who used to fly with Air Malta were now “displaced” to Ryanair because it offered cheaper holidays.

“We did not need Ernst & Young to tell us this. These are facts.”

However, Mr Fenech also conceded that Malta depended on low-cost carriers to continue seeing growth in tourism.

“We need to achieve a balance,” he said, adding that Ryanair’s proposals for expansion had to be evaluated in this context to ensure no further blows were dealt to Air Malta.

Pressured to ask whether he had faith in Ernst & Young, Mr Fenech dodged the question by saying he had faith in the restructuring committee which is engaged in numerous discussions and will begin negotiating with the European Commission in the coming days.

“At the end of the day, this is not a plan for Ernst & Young but a plan for Air Malta.”

It has been claimed that exorbitant charges by Malta International Airport are crippling Air Malta and that other airlines are able to compete despite the charges because they qualify for assistance schemes when they open new routes.

Asked about MIA fees, Mr Fenech speaking at SR Technics said all suppliers of Air Malta had to pull their weight to ensure the long-term viability of the national airline.

“Part of the plan is to negotiate with all suppliers that offer services to Air Malta to ensure everything is done efficiently and cost-effectively.”

He added that the impact of the Air Malta restructuring exercise on the country’s deficit depended on whether the Commission qualified the expenditure as an investment or as state aid. If it was seen as state aid, Mr Fenech said, this would have to be registered as a government expense which would in turn affect the deficit.

“So it’s too early at this stage to say how it will affect the deficit.”

Mr Fenech was speaking toThe Times after a press confer-ence to mark the third year of this legislature, where he gave an account of his ministry’s achievements.

He said the country had faced a series of extraordinary challenges but emerged with a sense of stability and competitiveness, keeping unemployment as low as possible and remaining attractive to investors.