The Malta Independent 9 May 2024, Thursday
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MIA And Ryanair

Malta Independent Sunday, 21 June 2009, 00:00 Last update: about 16 years ago

With reference to Alfred Mifsud’s comment piece of 31 May, I feel that some clarification is needed.

To begin with, readers should be aware that if MIA is to be considered as a “private monopoly de facto”, as Mr Mifsud called it, then one should know how heavily regulated MIA is by its regulator, the Director of Civil Aviation (DCA), and rightly so. MIA is not in a position to increase its charges, whenever it likes. There are very stringent rules and regulations and a very well defined process that MIA has to follow. These rules, regulations and procedure are very well known to the airline industry as they are directly involved in them. The last time that an increase in the Passenger Service Charge was allowed by the regulator was in 2006. That is over three years ago.

Mr Mifsud agrees with Ryanair that MIA should not compare itself with Heathrow, Frankfurt or CDG, as it is not a business airport hub like them. MIA’s quality of service is even better. On the other hand, should MIA compare itself with airports like London Gatwick? The answer is simply NO. London Gatwick, whose charges are higher than MIA’s, handles 34 million passengers per year and only uses one runway, while MIA handles just under three million passengers a year operating on two runways, therefore resulting proportionately in higher operating costs per passenger. Yet MIA can compare very well with any airport in terms of its infrastructure, both airside and landside. MIA is internationally recognised as one of the best in its category and has won international awards in this field. I believe that this is very much in line with the country’s aspiration of becoming a centre of excellence by 2015.

Now comes the very tricky question of whether MIA should compare itself with secondary airports that primarily service tourist traffic, with airports in tourist resorts.

If one looks at a recently added airports in Ryanair’s destinations, and picks on Trapani in Sicily and see the cost structure that the airport in Trapani has, one will come to only one conclusion that it is “incomparable”. Trapani is principally a military airport and the very heavy cost of maintaining the one runway is taken up by the Italian Air Force and not by the civilian side. The Italian Air Force also takes up the cost of security. MIA has two runways and very recently went through a major expense of resurfacing runway 13/31, which is 3500 metres long and 60 metres wide. It has also just enlarged Taxiway ALPHA, which is a holding area for aircraft prior to getting on to the runway itself. Other Taxiways are being widened so as to make accessibility to the runway by the larger types of aircraft with wider wingspans easier to manoeuvre. These costs are no trivial expense. As MIA is a forward looking company, it does not look at the passenger arrival of today but must look positively at the potential growth of the future and be prepared for it to ensure that when growth does come, and growth will come back slowly but surely, it would be in a position to meet both the demand by the increasing number of passengers and the larger types of aircraft that is slowly already happening. Does the civilian side of Trapani airport have to bother about such high investment costs? The simple answer is NO. Does Trapani airport have a costly, fully-fledged, 24-hour National Weather Station? The simple answer is NO. The Italian Air Force looks after such costs. Does Trapani airport have a category 9 (the highest is 10), 24-hour fire-fighting capability, which comes at a very high cost? The answer is NO. The fire-fighting services available at Trapani airport are provided by the Italian Air Force. Does Trapani Airport have to face the very high cost of running and maintaining sophisticated equipment? The answer is NO. The Italian Air Force looks after these. Does Trapani airport have a terminal of the same standard as ours? The answer is NO.

To go further north, should MIA compare itself to Hahn (near Frankfurt) or Allgaeu Airport, both in Germany? Here too the answer should be NO. These two airports are secondary airports that also served as military airfields.

Ryanair argues that it is not bothered about the comfort of its passengers in a terminal, and here one must emphasise the word “terminal” because Ryanair offer good comfort, safety and security on its planes and therefore one must not confuse one with the other. It considers having coffee shops in a terminal as a “frill”. They don’t care if one tells them that the airport infrastructure is “state of the art”. They would tell you that as far as they are concerned one room with one check-in counter is enough.

Mr Mifsud argues, “The problem is the way that the privatisation of MIA was structured. Where is the sense in leaving such a strategic monopoly in private sector hands and create a situation where the narrow interest of the private monopolist could be in conflict with the wider interest of the country?” Well, Mr Mifsud is entitled to his opinion as far as “the way that the privatisation of MIA was structured”. The facts however prove otherwise. The privatisation of MIA was a success. Since MIA was privatised in 2002, the company has registered a 23 per cent increase in turnover and 20 per cent in passenger movements; it has channelled e30 million into investments, and has fared satisfactorily on the stock market; suffice it to mention that the initial price per share paid by the private shareholder was e1.70, which is now e2.20. Moreover, the first net dividend paid after privatisation in 2002 was .012 euros per share while only last month MIA paid .057 per share equivalent to a 375 per cent increase. More importantly, MIA secures the employment directly and indirectly of some 3400 employees and pays some e5 million in taxes to the government.

Mr Mifsud has certainly no right to accuse MIA of being “in conflict with the wider interest of the country”. MIA has often publicly stated that it has supported, supports now, and will carry on supporting MTA with millions of euros to assist MTA’s marketing efforts. MIA also undertakes its own marketing, which also adds up to more millions of euros. MIA has repeatedly made it clear that it offers incentives to airlines on certain unserviced new routes, which, when and if taken up, run into millions of euros. But even its efforts to induce airlines, via incentives, MIA is bound by stringent EU Directives that apply not only to Malta, but to all airports, small or large, in Europe that ensure a competitive level playing field amongst airports. Is MIA “in conflict with the wider interest of the country”? Or does this mean that MIA is in conflict with its own shareholders, including the government, by spending such sums that could go to the profit side of a balance sheet rather then the debit side.

These public arguments between Ryanair, which has its own agenda and certainly not “the interest of the country” at heart, and MIA is a deja vu battle of words, similar, if not identical, to the battle that took place three years ago. Yet a modus vivendi was found and Ryanair started its most welcome and valuable operation to Malta, increasing its destinations. If left alone, the two sides will come to an agreement without one insulting the other and without the unnecessary interferences of outsiders. Ryanair’s style is well known to everybody in the business. It is well known within the airport community Europe-wide and to the regulators in Brussels, not to mention the European Court of Justice that found Ryanair guilty of infringing one or two regulations, here and there.

Ryanair likes being noisy and enjoys attracting the attention of the public by projecting itself as the defender of their rights. On the other hand, it then invents charges that are passed on to the passenger, not in the price of the ticket, but as an added cost, such as paying for going to the toilet on its aircraft. Ryanair charges for checking in your bag, charges for every half-kilo of excess baggage and other services that a passenger would take for granted as being part of the price of a ticket. True, it never charged, like other airlines, a fuel surcharge (hats off to it).

Passengers are, however, extremely demanding and here one should give an example. At MIA, if an escalator, a lift, a toilet or a computer breaks down and one waits for an extra two minutes to check in, the number of letters that appear in the press reporting such incidents and insisting that such breakdowns are unacceptable are very evident. We take it for granted that the airport should be clean, fully functional, well lit, and provide all kind of services punctually and efficiently; and so it should be. We should be proud of our airport, no matter who runs it, be it the private or public sector. On the other hand, everyone knows that the private sector can do a better job, and MIA is “The” case in point.

I was an airline man for 23 years and am fully conversant with the needs and expectations. I am fully aware of the constant tug-of-war that goes on between airlines and airports. For the last seven years of my professional life I was closely involved with MIA and the Policy Committee of the Airport Council International (Europe) representing MIA. I am therefore also fully aware of the need and expectations of the airports too. In the end, the two sides always find ways to reach amicable solutions. My appeal here is to let Ryanair and the stake holders, be they MIA, MTA, MHRA or any other body, to find a solution around a table, as I am sure they will. It will be more beneficial to all concerned, including the public in general.

Mr Darmanin is an ex-director of Malta International Airport

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