Air Malta’s top brass yesterday warned against too much competition, particularly from low-cost airlines, as this can have “devastating effects” on the future of the national carrier and tourism at large.

Addressing members of the tourism industry, particularly hoteliers and restaurant operators, Air Malta chairman Louis Farrugia said that although the Malta Hotels and Restaurants Association was one of the main lobby groups pushing for the introduction of low-cost carriers, more competition might not be healthy.

“By encouraging too many more airlines to serve our island we could be tipping the balance against Air Malta’s sustainability,” Mr Farrugia cautioned.

“Let’s ensure that we succeed through sensible management in allowing competition to set the market prices at sustainable levels, which will allow our current success to continue,” he said.

He warned that if Air Malta stopped trading, other airlines would move quickly to take its place, adding that this would have devastating effects on the tourism industry as the cost of travelling to Malta would substantially rise.

“Malta’s successful tourism business model would collapse. To maintain this model requires managing a delicate balance,” Mr Farrugia said.

The same message was echoed by the airline’s chief executive, Peter Davies, who also addressed the MHRA’s annual conference.

Malta was late in allowing the entrance of low-cost airlines into its market, fearing that this would have a knock-out effect on Air Malta. However, in 2006 the Government had started subsidising low-cost flights to and from Malta when overall tourism figures were low.

Since then, particularly through Ryanair and Easyjet, tourism has picked up, registering record arrivals over the last five years. In the process, however, low-cost carriers nearly brought Air Malta to bankruptcy.

In 2010 the Government had to step in with a €52 million loan to keep the national carrier flying until a restructuring plan and the injection of state aid was approved earlier this year by the European Commission.

According to Mr Davies, the restructuring plan has already yielded results to the point that, during the summer season, the company managed to register a small profit – the first time in years.

Admitting that Air Malta had not been “prepared for this onslaught” from low-cost carriers, Mr Farrugia said the company was now on a sounder footing. However, more work was required to ensure it was safe.

He said that since Air Malta could not be given any more State aid in the coming 10 years, the only other route for the company would be an injection of private capital.

Air Malta was also on the agenda of the Government and Opposition representatives at the conference.

Labour spokesman Gavin Gulia said the airline should form part of the tourism ministry being such an important component of the country’s strategy in the area.

However, the minister in the hot seat, Mario de Marco, disagreed.

“We should keep Air Malta as a separate entity from tourism policy. While both are interlinked, the Government and tourism policymakers have also to show that they are at arm’s length when talking with other airlines that bring 55 per cent of our tourists,” the Tourism Minister said.

Ali Hayward, EasyJet’s UK commercial manager, announced that the airline would be adding another weekly flight from Manchester next summer to the five it already operated every week. She said that this would provide 10,000 extra seats to Malta’s tourism industry.

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