Notwithstanding the arrival of low-cost carriers, Air Malta registered a 15 per cent average increase in passengers carried in the last nine months with prospects for the future looking good, the airline's chief commercial officer Brock Friesen told The Times Business.
Dr Friesen said the new marketing strategy adopted in 2006 is returning the expected results after the airline began to focus on what customers wanted while addressing new market realities and changing customer expectations.
Before implementing its new strategy, the airline used authoritative international marketing research to identify customer needs and focus on these in order to be competitive. The airline identified the market segments potentially wanting to visit Malta and discovered the changing trends from long, seven- to 14-day holidays to the fast-growing short holiday market of between three and seven days.
Dr Friesen explained that between 2000 and 2006, Malta's tourism arrivals were stagnant as a result of the "outdated" tour operator sales strategy and this was one of the main reasons why hoteliers and others saw low-cost carriers as the only solution to bring tourists over.
The airline had concluded that its past marketing strategy was no longer relevant because tour operators were still focusing on the long summer holiday market, which is not growing. The airline and the country had been delegating the marketing to the tour operators and provided them with cheap airplane seats in summer but which remained empty in winter and the shoulder months.
Moreover, tour operators were losing market share in northern Europe because of low-cost carriers and because customers wanted more control of their travel plans. Air Malta's new approach to tour operators balances the changing airline business in favour of individual traffic while, at the same time, continuing to assist operators without having an adverse effect on the airline's revenues.
Dr Friesen said the carrier knew that its success depended on year-round business and this was why it decided to introduce a new marketing strategy targeting the customers directly in their home markets.
With this in mind, the airline invested heavily in its new website and booking engine offering transparent pricing, hotels and car rentals and cheap offers for early bookings. This move resulted in a 1,000 per cent increase in internet bookings over a nine-month period, climbing to 22 per cent of all airline sales. The airline's objective is to double its internet bookings by next year, he said.
Moreover, Air Malta took the bold decision of eliminating routes served by one or two fights a week and focused more on destinations that could support between one and five flights daily. Flights to Nantes, Bucharest, Oslo, Newcastle and Glasgow, among others, were stopped as services to London, Paris, Munich and Frankfurt were increased.
Dr Friesen said the Lufthansa code share has been a spectacular success. Air Malta now carries more traffic from Stockholm through this code share than it did through its own direct service. Today, Air Malta is offering three daily flights to the Scandinavian capitals via Munich and Frankfurt.
In addition, the airline focused more on routes within a three-hour range from Malta in order to minimise fuel costs and enable competitive fares. In fact, average fares have dropped by five per cent a year but revenue is still on the increase in view of increased patronage.
Along with its new network, Air Malta also invested heavily in advertising campaigns in the country's main markets that included the United Kingdom, Germany, Italy, Switzerland and France. The campaigns are usually immediately visible and the results are monitored closely.
Dr Friesen said that traffic increased sharply as a result of the changing marketing philosophy to attract tourists for the nine months of the year that were previously ignored. Traffic in May, usually considered to be a tricky month, increased considerably with an extra 40,000 (+30 per cent) passengers being registered when compared to last year.
Air Malta wants to maintain this growth and focus even more on the winter and shoulder months. In the first few months next year, it will start operating from Charles De Gaulle airport in France in addition to the existing Paris Orly operation and will be increasing flights from Munich and Milan.
Glasgow will be dropped from its schedule but the airline is in the process of finalising a new code share agreement in order to increase the Glasgow operation from two flights a week to two flights a day.
The code share agreement will also cover other UK regional airports offering daily connectivity to Malta via its London and European gateways. Air Malta is confident that the Scandinavia success can be replicated also in the UK market.
With regard to code share agreements, which are clearly working in Malta's favour, Dr Friesen said the airline will conclude another two by the end of the year and at least another one next year.
Asked about the price of oil and the increased fuel costs, Dr Friesen said that, unfortunately, this added expense was having an effect on the increased revenue generated from the better results of the new marketing strategy. At the current fuel cost levels, Air Malta's fuel bill will see an increase of €62 million compared to four years ago.
Air Malta's aim of making Malta a 12-month destination was becoming a reality. Speaking about figures for this summer, Dr Friesen said the airline is not expecting much growth in July and August due to the fact that accommodation for these months is not available because hotels are fully-booked. However, September is looking better than last year and October will probably be a good month too.
In the meantime, the airline will continue its marketing with focused advertising campaigns from its €3 million budget allotted for marketing this year.
Asked how low cost carriers have affected the airline, Dr Friesen said that although it suffered a blow at the beginning, Air Malta has proven that it can compete well with its competitors. Ryanair, he said, decreased its London Luton flights from seven to five flights a week when, at the same time, Air Malta increased its London scheduled services.
"We are competing on all aspects but growth is limited because of the lack of hotels and this is where Ryanair is creating difficulties in summer. We would like to see more hotels, especially four-star hotels in order to bring more tourists to Malta," he said.
Dr Friesen said the new marketing strategy adopted in 2006 is returning the expected results after the airline began to focus on what customers wanted while addressing new market realities and changing customer expectations.
Before implementing its new strategy, the airline used authoritative international marketing research to identify customer needs and focus on these in order to be competitive. The airline identified the market segments potentially wanting to visit Malta and discovered the changing trends from long, seven- to 14-day holidays to the fast-growing short holiday market of between three and seven days.
Dr Friesen explained that between 2000 and 2006, Malta's tourism arrivals were stagnant as a result of the "outdated" tour operator sales strategy and this was one of the main reasons why hoteliers and others saw low-cost carriers as the only solution to bring tourists over.
The airline had concluded that its past marketing strategy was no longer relevant because tour operators were still focusing on the long summer holiday market, which is not growing. The airline and the country had been delegating the marketing to the tour operators and provided them with cheap airplane seats in summer but which remained empty in winter and the shoulder months.
Moreover, tour operators were losing market share in northern Europe because of low-cost carriers and because customers wanted more control of their travel plans. Air Malta's new approach to tour operators balances the changing airline business in favour of individual traffic while, at the same time, continuing to assist operators without having an adverse effect on the airline's revenues.
Dr Friesen said the carrier knew that its success depended on year-round business and this was why it decided to introduce a new marketing strategy targeting the customers directly in their home markets.
With this in mind, the airline invested heavily in its new website and booking engine offering transparent pricing, hotels and car rentals and cheap offers for early bookings. This move resulted in a 1,000 per cent increase in internet bookings over a nine-month period, climbing to 22 per cent of all airline sales. The airline's objective is to double its internet bookings by next year, he said.
Moreover, Air Malta took the bold decision of eliminating routes served by one or two fights a week and focused more on destinations that could support between one and five flights daily. Flights to Nantes, Bucharest, Oslo, Newcastle and Glasgow, among others, were stopped as services to London, Paris, Munich and Frankfurt were increased.
Dr Friesen said the Lufthansa code share has been a spectacular success. Air Malta now carries more traffic from Stockholm through this code share than it did through its own direct service. Today, Air Malta is offering three daily flights to the Scandinavian capitals via Munich and Frankfurt.
In addition, the airline focused more on routes within a three-hour range from Malta in order to minimise fuel costs and enable competitive fares. In fact, average fares have dropped by five per cent a year but revenue is still on the increase in view of increased patronage.
Along with its new network, Air Malta also invested heavily in advertising campaigns in the country's main markets that included the United Kingdom, Germany, Italy, Switzerland and France. The campaigns are usually immediately visible and the results are monitored closely.
Dr Friesen said that traffic increased sharply as a result of the changing marketing philosophy to attract tourists for the nine months of the year that were previously ignored. Traffic in May, usually considered to be a tricky month, increased considerably with an extra 40,000 (+30 per cent) passengers being registered when compared to last year.
Air Malta wants to maintain this growth and focus even more on the winter and shoulder months. In the first few months next year, it will start operating from Charles De Gaulle airport in France in addition to the existing Paris Orly operation and will be increasing flights from Munich and Milan.
Glasgow will be dropped from its schedule but the airline is in the process of finalising a new code share agreement in order to increase the Glasgow operation from two flights a week to two flights a day.
The code share agreement will also cover other UK regional airports offering daily connectivity to Malta via its London and European gateways. Air Malta is confident that the Scandinavia success can be replicated also in the UK market.
With regard to code share agreements, which are clearly working in Malta's favour, Dr Friesen said the airline will conclude another two by the end of the year and at least another one next year.
Asked about the price of oil and the increased fuel costs, Dr Friesen said that, unfortunately, this added expense was having an effect on the increased revenue generated from the better results of the new marketing strategy. At the current fuel cost levels, Air Malta's fuel bill will see an increase of €62 million compared to four years ago.
Air Malta's aim of making Malta a 12-month destination was becoming a reality. Speaking about figures for this summer, Dr Friesen said the airline is not expecting much growth in July and August due to the fact that accommodation for these months is not available because hotels are fully-booked. However, September is looking better than last year and October will probably be a good month too.
In the meantime, the airline will continue its marketing with focused advertising campaigns from its €3 million budget allotted for marketing this year.
Asked how low cost carriers have affected the airline, Dr Friesen said that although it suffered a blow at the beginning, Air Malta has proven that it can compete well with its competitors. Ryanair, he said, decreased its London Luton flights from seven to five flights a week when, at the same time, Air Malta increased its London scheduled services.
"We are competing on all aspects but growth is limited because of the lack of hotels and this is where Ryanair is creating difficulties in summer. We would like to see more hotels, especially four-star hotels in order to bring more tourists to Malta," he said.