Issue link: https://maltatoday.uberflip.com/i/753405
maltatoday, SUNDAY, 20 NOVEMBER 2016 6 News No denial on Air Malta losing Lufthansa's ground handling MIRIAM DALLI MALTA'S ailing national airline may have lost German airline Lufthansa as one of its ground- handling clients at the Malta In- ternational Airport. Questioned directly by Malta- Today, Air Malta did not deny that Lufthansa's ground han- dling will be serviced by Avi- aserve who already services a number of airlines, including Emirates, Ryanair, easyJet and Brussels Airline among others. In reply to this newspaper's questions, Air Malta said it has a number of ground handling contracts to handle third party airlines, which are re-negotiated periodically and extended. "The airline also endeavours to attract more airlines to contract its ground handling services," a spokesperson for the national airline said. The spokesperson pointed out that, in the last six months, Air Malta secured four new airline customers. "It is a normal business pro- cess that new contracts are won and some are lost. Such deci- sions are based on a number of factors and at this point we feel it is not prudent to comment further," the spokesperson said. As a ground handler, Air Mal- ta handles passenger, baggage, ramp and cargo warehouse- handling, aircraft servicing and cleaning, to automated weight and balance, check-in and boarding. Sources speaking to Malta- Today pointed out the irony in that another agent – and not Air Malta – would be servicing Lufthansa whilst the latter has a codeshare agreement with Air Malta. Former Air Malta boss Giordimaina takes up PanAfriqiyah position MATTHEW VELLA FORMER Air Malta CEO and Luf- thansa Technik boss Louis Giordi- maina has been head-hunted by the Libyan owner of Afriqiyah Air- ways to develop his Malta-based subsidiary PanAfriqiyah. Giordimaina was appointed on 11 November by Afriqiyah boss Abubaker Elfortia, according to Maghreb Confidential, together with Nicole Frei, a former execu- tive at Dublin-base CityJet. The PanAfriqiyah subsidiary is expected to enable Elfortia to fly his operation by getting round the ban on Libyan companies operat- ing in European airspace. Giordimaina is currently head of fleet management company Hy- perion Aviation, a Maltese char- ter operator that flies Bombardier Challengers, Gulfstreams, and other executive jet airlines. He also headed Eurojet for a year. PanAfriqiyah is now under con- trol of a Belize-registered company called Glencor International. Louis Giodimaina tendered his resignation from Air Malta in 2014. The former Air Malta chief engineer, who had returned to the national airline as chief executive in early November 2013, was said to have clashed with the new Air Malta chairman Maria Micallef. Giordimaina has over 38 years' experience in the aviation indus- try, having joined Air Malta's engi- neering department in 1975 as an aircraft engineer. He occupied var- ious positions in the engineering department, with additional active roles in the airline strategic plan- ning, aircraft purchasing, sale and leasing as well as contract negotia- tions. In 1994 he was appointed the first Maltese chief engineer of the national airline. He was also instrumental in the setting-up of Lufthansa Technik Malta, a joint venture between Lufthansa Technik and Air Malta, of which he was appointed CEO in 2002. He occupied this role until 2011 after which he was retained as director of the company until September 2013. In 2006 he spearheaded Luf- thansa Technik Malta's expansion, which saw the construction of new hangars and facilities, with the lo- cal workforce climbing from 140 to 600, to become one of the major worldwide Maintenance and Re- pair Organisation (MRO) players. In 2008 he was appointed chair- man of the Water Services Cor- poration and in November 2011 he was appointed executive chair- man of Enemalta. An aircraft en- gineer by profession, Giordimaina also read business management at Warwick University, UK. He is a Fellow of the Royal Aeronautical Society. Fly the national flag? Or go As Air Malta flounders in debt – its future uncertain and a strategic partnership with a big airline still only a pipedream – Ryanair celebrates 10 years of operations in Malta, announcing further routes and plans to base a fourth aircraft in Malta. PAUL COCKS asks major players in the industry if Malta still needs a national airline, if the airlines are operating on a level playing field and if the rise of low-cost carriers is to blame for Air Malta's financial woes NOVEMBER 2006: The first out- bound Ryanair flight from Malta leaves for London, followed soon af- ter by a flight to Pisa. Those were the first two routes that Ryanair started operating from Malta, quickly grow- ing over the last 10 years to 42 routes and over 140 weekly flights. Some people argue that that day marked the beginning of the end for Air Malta, and question why suc- cessive governments have spent so much on trying to ensure the sur- vival of the Maltese national airline. David O'Brien, Ryanair's chief commercial officer, said this week that with a fourth aircraft to be based in Malta from next year – and with the airline projecting to carry 2.1 million passengers to and from Mal- ta next year alone – Ryanair could soon be considered Malta's national airline. Tourism Minister Edward Zammit Lewis told MaltaToday that Ryanair has played an important role in the transformation of Malta's tourism industry, not only by opening new routes and growing existing ones, but also by spearheading the rapid expansion of the off-peak months by introducing several new services during the winter season. But he also stressed the strategic importance of Air Malta. "Air Malta remains the only na- tional asset for our tourism industry and the country's strong economy in general," he said. "It is precisely why the government is committed to build a successful relationship with a strategic partner which ensures a positive turnaround for Air Malta." Air Malta is the country's only na- tional asset in the tourism industry, which raises the point: Why allow competition to come in and take over a huge chunk of the market? And that raises another – possibly the most contentious – argument in this whole debacle. Minister mum on low-cost subsi- dies Air Malta is in financial limbo be- cause the government is no longer allowed, under EU rules, to inject money into the company. In plain terms, the government can no long- er subsidise Air Malta. The issue in contention is not whether one agrees with subsidies or not. The problem is that while the gov- ernment can no longer subsidise Air Malta, not even to save it from bankruptcy, it pays low-cost carriers (LCCs) like Ryanair millions of euros each year under regional develop- ment programmes, that are allowed – and encouraged – by the EU. LCCs benefit from these funds since most of the destinations they fly to are considered second-tier des- tinations, thus falling under 'regional development'. In 2015 alone, the Maltese govern- ment paid over €16m to LCCs in regional development funds, most of them to Ryanair, which has the larg- est LCC presence in Malta. The tourism minister would not disclose how much has been paid out to LCCs in 2016 so far, and would not comment on how a level playing field could be guaranteed in the industry, when such funds were given the EU's blessing while the government could not pitch in to save the national airline. "While one can understand that information about 'route develop- ment' or 'strategic marketing sup- port' is of a sensitive commercial nature and bound by confidential- ity clauses with respective airlines, based on our active engagement with airlines, the government has in fact encouraged route expansion in a way which opened up new mar- kets," he said. Air Malta or bust? Zammit Lewis said that Malta and Ryanair crossed paths at an impor- tant juncture in the country's tour- ism development strategy. "Malta has grown its tourism vol- ume overnight, and tourism expend- iture levels on an annual record basis almost every year," he said. This view is shared by Tony Zahra, president of the Malta Hotels and Restaurants Association (MHRA) who insisted that LCCs had been ex- tremely beneficial to Malta's tourism industry and other ancillary sectors. "When Ryanair came to Malta, low-cost airlines were gaining mar- ket share across Europe and world- wide," he said. "This world is beau- tiful because it changes constantly, and low-cost air travel was a natural progression in the aviation industry." Zahra pointed out that he has been saying for at least the last seven years that the business model adopted by Air Malta had expired, that it was no longer financially feasible in today's market and that it no longer made sense in a reality no longer governed by the Air Services Agreement that all legacy airlines used to base their model on. "Low-cost airlines presented a new model that highlighted the major shortcoming of most legacy airlines, mainly a large number of employees, exorbitant costs and low levels of service," he explained. As for the regional development Ryanair chief commercial officer David O'Brien (right) cutting a cake marking the airline's 10th anniversary of operations to Malta Louis Giordimaina