Matthias A. Merzhäuser
After discussing potential route development from various other source regions, this time the new EU member States on former Warsaw Pact territory are looked at.
Poland
The Warsaw to Malta scheduled route was (as usual) pioneered by Air Malta way back in 1995 with a once weekly scheduled flight (summer schedule). During the early to mid-1990s, Hungary, Poland and Bulgaria were recognised as future markets to diversify Malta’s source market portfolio.
After the first risky years, Air Malta was replaced, apparently due to tour operator policy, around 2000. Flights were shifted to charter carrier White Eagle Aviation. These flights were then shifted to State carrier LOT, and these flights were in turn shifted to LOT’s low-cost subsidiary Centralwings. Surely with every shift one “attracted a new airline”. But it remained basically equal frequency and equal capacity.
In 2007, Centralwings services started on 30 May once a week, which ended with the summer season. This means not one single direct flight from Poland with 40 million inhabitants for the greater part of the year despite a dotcom airline running. MIA’s management is absolutely right saying that this is an underserved market. Towards the end of January 2008 there are still no Malta flights available on the Centralwings website at all. Air Malta has been making much more from far less populous Eastern EU markets, both as regards frequency and volume, particularly Hungary.
While appreciating Central-wings work, it is good that one also has Lufthansa-Air Malta in Frankfurt, and additionally Air Malta in Munich, Düsseldorf, and Vienna with connections from/to various places with Lufthansa/LOT/Austrian. Alitalia offers some connections too. But direct flights make a destination more attractive.
Generally, for present and future eastern EU to Malta routes, there are neither noteworthy bilateral business relationships between there and Malta nor larger ethnic communities. Additionally, low-cost country means low disposable incomes for average citizens. One needs the developing new middle class with sufficient disposable income, and this is still a developing market. Nobody can expect arrival miracles, as mass purchasing power is not yet as high as in southern, western and northern Europe.
Nevertheless, Poland has, thankfully, developed significantly recently. It is the most populous new EU country with figures comparing to Spain. Indubitably, Spain’s consumer market is much stronger, and Malta can also profit from programmes supporting language-learning tourism, although the main force seems to have been MTA’s new tough campaigning. Yet for Polish tourists Malta has two key factors not found at home: the Mediterranean flair and sunshine. Despite being no great beach vacation spot, the sunshine island factor generally remains important for tourists from the cold, cloudy, dull, dark and rainy areas of Europe.
Apart from stabilising Warsaw one could add either Katowice or Krakow, and, maybe, Wroclaw, starting with summer flights. Running a route to the Mediterranean in deep winter is difficult: those who can afford it make sure they go to where they really get sun and warmth (Egypt, UAE, or Thailand) or to skiing places.
Certainly there are charter carriers around, but as one prefers low-cost carriers, for Warsaw one has Centralwings; should they again operate. Maybe they could fly for a longer period, or increase frequency, or add another route?
Wizzair, the leading low-cost carrier to/from the eastern EU, has a strong presence all across Poland. Seasonally they also operate to e.g. Crete. Maybe they could offer Malta to the very populous Katowice-Krakow area, which makes most commercial sense; it might also be considered by Air Malta given these (are forced to?) link even places with quite less potential. Ryanair is to be found at almost every Polish airport, so far concentrating on east-west traffic. But why not look south? A possible routing scheme cutting costs further is explained further on. Norwegian is particularly strong in Warsaw, which should stay with Centralwings.
Having no long-term binding risks for the carrier is important. Asking carriers directly for a three or five-year, year-round commitment from a genuinely new area, a low-cost country, with three or so weekly flights might eventually not get one anywhere due to this being a big risk for carriers, even with incentives. Given that except for Warsaw a Malta link would be a genuinely new service, anything should be welcome.
Helping middle-class hotels
Generally, the emerging mass tourism markets could provide an opportunity especially for two to four-star hotels, particularly with all-inclusive offers. Yet one should not equate Eastern Europe with low spending: for example, Russian tourists are those spending most in Malta one hears. One should not overestimate the market, but also not neglect it.
For destination and hotel image, ordinary tourists who do not spend so much are way better than filling normal hotels during the summer holidays with folks from certain “all important” markets scaring tourists and giving the hotel’s neighbours a bad time. It is possibly also better than developing Malta for stag/hen night tourism, as was once suggested by some quarters (note: no airline, MTA, MHRA or political party).
Czech Republic
Already during the Cold War CSA / OK Jet ran flights from Prague. Then one shifted to Fischer Air and Air Malta. Today Air Malta runs flights with CSA acting as local marketing partner (code-share, twice to thrice weekly, summer). A stabilised winter run would be welcome but those who can afford a winter vacation increasingly go directly for medium and long-haul destinations. Czech leisure airline Travelservice flies its B737-800s to the Med in summer, while in winter they go to the Canaries or the Gulf but also to places like Thailand, Venezuela or Brazil (with one fuel stop).
Brno is only 130kms north of Vienna, so no real addition. Ostrava is just 100kms south of Katowice, which should have priority and Karlovy Vary is not that far from Prague (140kms).
Additional Prague flights might be combinations with Leipzig in Germany, Air Malta thus keeping both open during winter. A summer combination alternative could be Katowice.
Slovakia
It would be no plus if one would damage the Vienna flights (summer: Air Malta five weekly flights scheduled, Austrian twice weekly serial charters) through subsidized parallel flights from Bratislava (50kms of motorway off Vienna airport). Bratislava also nibbles at the Budapest catchment area.
But Kosice, Slovakia’s second largest city and a steel industry centre, is 400kms east of Bratislava. The base of low-cost carrier SkyEurope sources on northeast Hungary and southeast Poland too. Vienna airport is major shareholder also of Kosice airport. Yet given average Slovakian monthly incomes of roughly EUR500, one should, if at all, expect only a humble start. This however is the case for some routes from other Eastern EU countries that nevertheless are already being linked.
Hungary
Air Malta has been flying to centrally located Budapest since the mid 1990s. Today one has three weekly flights (two Air Malta year-round, one Malev summer, just adding winter peaks). For winter, Hungarians increasingly go to really sunny and warm places (Canaries, UAE, Thailand). Budapest is the strongest of all new EU/ex Warsaw Pact country routes proving, over the past years, way stronger than for example Madrid, Leeds or Tunis – even with the latter two linked by low-cost airlines (Britishjet, Sevenair).
Malev is now run by some of the owners of Siberian airline giant Kras Air (former Aeroflot Soviet Krasnojarsk Directorate), part of the AiRUnion block. Their aim is developing Budapest into one of their gateways for traffic between the EU, Russia and Asia. Therefore it is important that this route is run by classic airlines Air Malta and Malev, which after all do a great job anyway.
Romania
Romania is the EU’s ultra-low-cost country with very low disposable incomes of average citizens. Concurrently, manufacturing in many fields is seeing a boost, e.g. in the auto/automotive business – Renault-Dacia cars (Pitesti) or Continental group tyres/parts (Timisoara) and the telecom/IT sector (Cluj). This might lead to a mid- and long term perspective of raised average incomes and opening up the market for outgoing mass tourism.
Some years ago Air Malta established regular services from Bucharest. More recently Air Malta sometimes ran several flights a week during the season.
Then one added Cluj-Napoca in the northeast. Cluj, which today is turning into a high-tech manufacturing hotspot, had rarely any links. Still Air Malta came to run quite regularly. During summer 2006 Cluj saw generally two weekly flights, one non-stop and one combined, with occasional winter flights too. During the 2006/2007 Christmas season and again in 2007/2008 one had days with Air Malta running four flights to/from Bucharest on one day. This is very impressive. But was this maybe not to a large extent Maltese outgoing travel? Bulgaria, Romania and Poland are after all establishing themselves as low-cost skiing destinations.
Anyway, in Bucharest, Air Malta switched from Otopeni International Airport to Baneasa, a city airport used primarily by low-cost carriers, switching from scheduled to charter (irrelevant as pure point-to-point traffic).
Summer 2007 seemed to be a bit weak, with both Bucharest and Cluj linked mostly only once weekly; yet Timisoara was added, covering the southeast.
Tarom’s (flag carrier) and Blue Air’s (Romanian LCC) jets are just as big as Air Malta’s and particularly Blue Air as low-cost carrier, like Ryanair, focuses on profit (guest-worker flights).
The Romanian market appears to be in good hands with Air Malta, but hopefully these flights cover variable costs. There are Air Malta eastern EU sectors where, even in months like June, loads occasionally count 20-40 passengers on a 140-seat plane, despite low fares.
Outsourcing thin routes
Maybe for when one has few or no services, or for when already variable cost coverage is a problem, one could motivate the operation of smaller planes from, speaking of Romania, e.g. Carpatair (Saab 2000, Fokker 100), as temporary (sub)charters or in general.
In the latter case, Air Malta could (seasonally) outsource the operation of a fixed set of thin scheduled and charter flights to a wetlease/acmi (aircraft, crew, maintenance and insurance package). At a fixed price per hour, flights could run under Air Malta flight number, be marketed by Air Malta, operate in Air Malta colours and possibly with Air Malta cabin crew – but at way lower trip cost than a mainline Airbus at equal revenue. The mainline operations remain streamlined. The freed Airbus capacity could be re-allocated to higher volume routes or alternatively put on lucrative lease-outs, given that one can sub-lease them out at a higher price than what one pays (well done anyway for the Etihad and Skyservice winter contracts). An outsourcing deal might therefore improve performance through lower trip costs at equal revenue/passenger volume, eventually providing the chance for cashing the leasing rate arbitrage, and additionally keep routes open longer, benefiting tourism, but with less financial damage.
Maltese tour operators might also save, because at present they have to immediately order a 140-seater or pay for long positioning flights.
For Carpatair’s planes, the Saab 2000 (cruise speed ca. 670 kph, 60 seats) could be OK for sectors up to 1300kms, while a Fokker 100 jet (100 seats) can reach any point across the current network at basically equal blocktime. Certainly there are other contractors. An option could be Maltese-Libyan Medavia getting a Bombardier Q400 (70-80 seats). For more by yours truly on the outsourcing of regional/thin routes issue see TOM, 11 July 2004.
Bulgaria
Air Malta has been linking Sofia (once non-stop, once combined with Istanbul) for many years, as a solid year-round service. Plovdiv charters source on Malta. Maltese customers might appreciate more customer-friendly Sofia flight times. During the greater part of the winter schedule this should work without difficulty.
Lithuania
Lithuania’s market primarily focuses on east-west sectors due to economic circumstances. Nevertheless, positive development could slowly reflect on outgoing tourism.
Vilnius, base of Lithuanian Airlines/FlyLAL, is the primary airport. Malta as a holiday island does not match FlyLAL’s scheduled route profile – but they also operate charters. Air Baltic (49.5 per cent SAS-owned) operates in Vilnius too. Yet this year Air Malta operated quite a few charter flights way into December: really impressive. Vilnius is located on the Byelorussian border.
Kaunas (second largest city) is Ryanair’s airport in Lithuania, not comparable to Vilnius. Still, it is centrally located when one looks at the whole country while only roughly 100kms away from Vilnius, on the Vilnius to Klapeida road.
Ryanair could have a Sweden-based jet do a Baltic Sea hop eastbound in the evening, change passengers, fly down to Malta, come up again, and land back in Sweden in the early morning for the usual runs: maximising utilisation. A good timing could be the nights Friday/Saturday, or Sunday/ Monday. One would offer a day-rim Baltic Sea crossing popular with Lithuanians working in Sweden and Swedish weekend vacationers, plus increase aircraft productivity with a night run which could be offered at very low cost and thus open southbound tourism to new customers. This pattern could also apply for Poland routes (see above), which should be more realistic to realise.
It would be sorry to see Air Malta go after the effort invested by them and tour operators. Air Baltic remains an alternative. It would however be a pleasure to see exactly Ryanair running Kaunas-Malta and/or according sectors from Poland.
Estonia
Estonia is the most economically advanced of the “Three Baltic States”. Outgoing tourist flights are not uncommon.
Malta only sees extremely sporadic incoming charter flights from Tallinn, unchanged since the days when Estonia regained independence.
St Petersburg (Air Malta), Helsinki (Finnair) and Riga (Air Malta) as nearest linked airports are too far away. One could ‘triangle’ with a nearby EU airport (like Riga or Helsinki, or as addition Tampere). Air Malta has great flexibility regarding this; Estonian has a slightly smaller plane (B737-500) with accordingly lower marketing risk (combination with Sicily or Tunisia possible). Whether charter or scheduled is irrelevant. While the 0 to 500 annual arrivals should improve, miracles cannot be expected (small market).
Latvia
Centrally located Riga saw Air Malta serial charters for the second summer (once weekly, thrice weekly in peak seasons). Later in the season Air Malta combined Malta and Catania for Riga thus keeping the route open. Air Malta and tour operators deserve reaping the fruits of their efforts.
Air Baltic could however be an alternative. The SAS subsidiary has developed a combination of a network and low-cost product. Air Baltic additionally offers links to many places in Scandinavia, the Baltics, and neighbouring FSU area currently not available with Air Malta-Lufthansa, meaning extra connectivity for destination Malta also beyond the point-to-point market.
