The Malta Hotels and Restaurants Association and the Chamber of Commerce, Enterprise and Industry have criticised the business plan proposed by Alitalia whereby many Air Malta flights will go south.

At the same time, the Tourism Ministry reiterated that Air Malta would not become a feeder airline for Alitalia and Etihad, and insisted that, despite the reports, “nothing has been agreed” yet.

The Sunday Times of Malta has reported that Alitalia is proposing to the government a four-year business plan, running between 2017 and 2020, in exchange of a 49 per cent stake in the national airline.

The plan, still unpublished, would see Air Malta cease flying to nearly a third of its present European destinations and instead increase frequency to North Africa and the Middle East. These would include direct point-to-point connections with Tunis, Tripoli, Casablanca, Larnaca and even Jeddah, in Saudi Arabia.

According to the proposed business plan, Alitalia will not make any fresh capital injection into the ailing Maltese airline, as already stated by the Italian carrier’s chairman, Luca Cordero di Montezemolo. Instead, all debts and liabilities and excessive staff will be absorbed by the government.

The business plan as reported would have disastrous consequences for Malta’s tourism industry

In reaction to what The Sunday Times of Malta reported, Tourism Minister Edward Zammit Lewis insisted that “nothing has been agreed” and reiterated that Air Malta would not become a feeder airline for Alitalia and Etihad.

“The report is only intended to create uncertainty on the future of the airline during a crucial stage of the ongoing negotiations and to destabilise the tourism industry at a time when unprecedented records are being registered,” he said.

Both the MHRA and the Chamber of Commerce have warned that the strategy being proposed was not the right one because any Air Malta plan had to take into consideration Malta’s connectivity with Europe, which was the main source of its tourism market.

“The chamber is of the opinion that the business plan as reported would have disastrous consequences for Malta’s tourism industry and beyond as it was said to include no new capital investment and complete flight rationalisation involving the loss of one-third of European routes, in favour of southern destinations,” the Chamber of Commerce said.

While emphasising the need of strategic alliances for Air Malta, it said that “any alliance needs to keep the entire perspective of Malta’s economic scenario well in focus”.

MHRA president Tony Zahra did not mince words on the plans to increase seat capacity to the south while axing connections to Europe. “Reductions in point-to-point routes from our main source markets is considered by the MHRA as a major threat to the sustainability of our tourism industry,” he warned.

“The MHRA stresses that the important source markets for our tourism sector are not in North Africa but, rather, in Europe,” he said.

According to the MHRA, the only connectivity model which makes business sense to Malta’s economy is point-to-point and not running the national airline as a feeder service to other potential air carriers.

ivan.camilleri@timesofmalta.com