A few months ago Air Malta signed a code-share agreement with Star Alliance member Turkish Airlines. This significantly improves the marketing base in Turkey. The Erdogan government has brought some economic stability and development and pushed Turkey towards the EU. All this improved the consumer market significantly.

Furthermore, the code-share offers connections to/from the Near and Middle East, Asia, and the FSU, definitely a plus for Malta’s connectivity. Hence, if volume grows on the Istanbul route one could put the flight non-stop with an A319.

So far Air Malta runs Istanbul in combination with Sofia, twice weekly. If Istanbul were to go non-stop eventually, what would happen to the Sofia route? What are the opportunities regarding the region, which is relatively near Malta (lower fuel/trip costs)?

Sofia could for example be one of the flights coupled with Thessaloniki, which currently is not linked at all, even though it had been for some years with Air Malta scheduled services.

Currently, it only sees very sporadic charter flights, though Athens seems to be a quite solid route.

Greece

A good year for the Greek routes was in 1999, when one had around 26,000 arrivals. After 2000, a similarly good year, the numbers plummeted – 2004 saw 9,000, 2005 just 10,500, and 10,000 in 2007. How come?

Emirates, who took up the Dubai route in 1998 after Air Malta had shouldered the initial development costs, did not always operate via Cyprus as at present. Before this, they had triangled Malta with Tripoli. And before this, they stopped over either way in Athens. They might probably have been carrying passengers between the two Mediterranean countries. Passengers loaded onboard from/for Dubai are, in a proper statistic, counted separately. So it clearly shows that in the late 1990s there was possibly quite more volume carried than today. Both consumer markets have since then improved and Malta is now in the EU. So is it impossible to reach these figures again?

Greece offers the big advantage that main airports have no night flying restrictions.

This means for example that Air Malta can run these routes by just forking out variable costs; so instead of leaving planes parked at MIA anyway with the leasing fee bill running on, they can make money. Indeed they do this on the twice weekly Athens run, operating the code-share with Olympic with the larger A320. While flights will unfortunately be stopped for part of the winter, except for the Christmas period, they will be back on the regular twice weekly run by the end of February.

Additionally, this year Air Malta ran an increasing number of charter flights from Malta to Corfu.

This market represents outgoing character, given Maltese interest in real estate there.

Then there is Thessaloniki, the most important airport in the northeast, which once was an Air Malta scheduled destination.

The immediate catchment area covers around one million inhabitants, so is not really big. A Thessaloniki flight could also be paired with the weaker of the two (or maybe for summer a third, additional) Athens flights. In this way, one could keep Athens open for a longer period, and add a third frequency by combining the extra flight to offset the marketing risk a bit. Or there is the possibility of combining with Sofia or, for two flights a week, one could also run once in combi with Athens and Sofia each, the second Sofia run going with Belgrade.

Thessaloniki is 900 kms away from Malta, equalling the Pisa sector. Athens is nearer.

Air Malta has been working with Olympic for quite a number of years in the marketing sector. This should be expanded if they could do the same for Thessaloniki. One will have to see how things develop due to the Olympic privatisation process. Having a local marketing partner is essential.

Greece’s second carrier is Aegean Airlines. When all aircraft are delivered, Aegean will have 30 Airbus A320s and would have replaced the remaining 10 Boeing B737-400s dating back to the early 1990s. Additionally, they have six Avro RJ100s, delivered new in 1999 and 2000. The RJ100s, which do mostly domestic Greek traffic, have more capacity than the notorious RJ70s while running at basically the same cost, so are more competitive. This could be a properly sized plane for adding a second carrier from Athens without putting Air Malta under too much pressure. If there could be a partnership between both carriers with mutual code-share marketing this could enhance development. But Aegean is generally careful as regards expansion. Malta’s openness on night flying could help: they could operate an RJ100 instead of leaving it parked. But Air Malta’s low fares do not make Malta so attractive for new competitors. Still, one could at least discuss it.

Yet for Thessaloniki, half an A320 per week would mean less risk than even one RJ100, while Air Malta could keep less loaded frequencies open at the same time (Sofia or Athens). Expanding the code-share accordingly would mean limiting marketing costs to a minimum. One again has to consider that volume in 1999 was almost triple what we have now.

Turkey

Should, despite the Turkish Airlines agreement, a combination still be necessary for Istanbul, Sofia would be combined with Belgrade and Thessaloniki respectively, what other options are there from Turkey itself?

During summer one could also consider opening up Izmir, which as a city alone already has over three million inhabitants. Like Istanbul, it attracts many domestic migrants from poorer areas, who in no way can go on holiday, language courses and so on, so one should have no illusions. But, if one were to run this combination once weekly over 25 weeks, using half an A320 (maybe for the weakest Istanbul day, or the addition of a third weekly flight without risking the seats of a whole plane), one would have to find a maximum of 2000 return passengers. This is maybe not totally impossible, particularly with the Turkish Airlines marketing machine in the background. The wider area is also very interesting for Maltese outgoing visitors, offering attractive sights, landscape, low accommodation costs, and the possibility of visiting the Greek islands Samos and Chios too. As regards extra trip costs for the carrier on the input side, apart from the airport charges the carrier would have to put in only a very small diversion (100kms more) from the non-stop line Istanbul-Malta, plus the approach/departure flight patterns. Currently, those who would want to visit either place have to spend 13 hours travelling via Germany, with according fares.

The four million inhabitants of the capital Ankara could also be a combination option, but means more diversion, so one would have to see about the cost/gain relation. For example, one could run one Istanbul flight in combi with Izmir and one with Ankara. One would then have a much better base with Turkish tour operators, while not running into pie-in-the-sky dimensions on account of the limited numbers required as quoted above. With tour operator commitments and Turkish Airlines code-share the otherwise expensive marketing cost is kept to a minimum.

So even with Istanbul requiring a combi, there is potential in Turkey, for summer at least, and one or both Sofia flights could still run as combi with Thessaloniki or Belgrade. Which now brings us to the Balkan heartland.

Serbia, Montenegro and

the JAT issue

Serbian flag carrier JAT Airways will be dropping flights to Malta after quite a number of years of year-round service. However, flights for next summer schedule are on sale.

JAT operated once weekly non-stop and once weekly in combination with Tripoli, which will also be dropped. In the past JAT had operated just a once weekly flight in combination with Tripoli.

JAT will actually withdraw about a third of their fleet from service, dropping some routes altogether while more attractive ones will also face frequency reduction. Aircraft will be leased out.

It is unfortunate, particularly for the local Serbian community who will now have to face quite a diversion and quite an extra cost (flying via Germany for at least e500 for what is just a direct 1000 km trip), and it is a bit of a loss for incoming tourism too. JAT has generally enjoyed significant growth in its passenger volume across its network and could also improve load factor. But filling a plane and filling it profitably are certainly two different things. JAT’s financial challenges are no novelty, and definitely not all were JAT’s fault (e.g. an embargo). It is a struggle, and one can only hope the restructuring process will not mean too many casualties – also as regards routes for the future, including any route.

One opportunity could be the Belgrade-Sofia combination, with another Sofia flight coupled with the usual Istanbul, or Thessaloniki, or Bucharest: so quite some flexibility.

One other opportunity, for summer, could be ‘triangling’ Belgrade with Tivat in Montenegro, which is overflown en route anyway, meaning the diversion is zero. Montenegro could be interesting for the Maltese outgoing market, offering very affordable vacations, while Malta might also get some tourists. This could work only for the real summer months and incoming volume should be very limited.

For Serbia, a good marketing partner would be important. Air Malta has worked with JAT occasionally: be it with pilot training in Yugoslavia in its early years, or with seasonal lease of planes. Air Malta should be very careful if it does not have a marketing partner. For Serbian and Maltese-Serbian customers, Air Malta could offer quite lower fares, even though one should have no illusions of seeing Malta being overrun by Serbian tourists, as the ordinary worker earns between e250 and e300 per month.

So the market is limited. Still, maybe one extra flight in summer (or rather: two half flights so that one has better frequency) and half a flight in winter might work. One would however have to be careful not to throw JAT totally out if low-fare carrier Air Malta were to attack too aggressively.

The carrier is certainly the priority for this not easy market, and its continuous service should also be appreciated. Air Malta could offer lower fares though.

Generally however, as shown, also southeastern Europe offers additional potential for Malta’s sourcing.