Air Malta’s restructuring weighs heavily on tourism operators this year as hoteliers warn against losing control of the national airline.
Hoteliers believe the airline has to be “hived off from political pressures” but are against full privatisation because this could lead “to loss of control” of what they say is a strategically important asset for the economy.
In the wake of positive tourism results for 2011, Tony Zahra, president of the Malta Hotels and Restaurants Association, said yesterday that Air Malta’s restructuring was one of the challenges the industry faced this year.
He was speaking at the presentation of the fourth quarter tourism results by Deloitte.
Mr Zahra said his association supported the airline’s restructuring efforts and posited the Bank of Valletta model as a possible solution for making Air Malta viable and profitable.
“Perhaps the answer lies in a similar arrangement that exists at present with Bank of Valletta whereby the government has a minority stake and the company operates independently of political pressure.”
Reacting to an item in The Times yesterday, saying the airline had to sell airport slots – the statement was based on a European Commission report that spoke of Air Malta having to “surrender” slots – Mr Zahra said he had sought clarifications from Air Malta’s top management.
“They assured me the airline will not be selling airport slots,” he said, adding it was strategically important that Air Malta remained the national airline.
The figures showed that tourist expenditure increased by €100 million last year in what Mr Zahra described as “a year to remember”.
The positive results were obtained despite the international economic turmoil and a war in Libya.
But economic problems across Europe were also a source of concern in 2012, Mr Zahra added, as Malta’s source markets were feeling “the very cold draught of recession”.
“This could have an effect on bookings, making this year an even more late booking year than previously,” he said.
This posed two challenges: Malta had to retain the same numbers of 2011 and, possibly, increase them and it also had to resist attempts by tour operators to reduce room rates because that would eat into the meagre profitability.
Mr Zahra said more investment in marketing and accessibility-related strategies and new ways of communicating through different media was needed.
“Looking in the rear view mirror should motivate us to look ahead with the right enthusiasm to overcome the forthcoming challenges,” he said in an apparent jibe at Air Malta chief executive Peter Davies, who reportedly said he did not like looking in the rear view mirror.
A presentation of figures by Raphael Aloisio from Deloitte painted a positive picture but it also came with some blots of concern.
While arrivals in 2011 increased in the first four months, they dipped in August compared to the previous year.
However, hotel rates continued to recover when combined with the level of accommodation. Five-star hotels saw their room rates go up to €67.80 from €54 while four-star hotels saw rates rise to €34.70 from €30.10 and three-star hotels saw room rates go up to €22.30 from €19.80.
Notwithstanding last year’s records – the net results were significantly better than 2009, which was a dismal year – gross operating profit levels were still below the achievements in 2007 and 2008 for both five- and four- star hotels.
In the three-star category, results were worse than 2010.