During a recent visit to a giant cruise liner, the Parliamentary Secretary for Tourism highlighted a new joint government and MIA initiative to strengthen marketing efforts in this direction – marketing Malta as a base, not just a port of call, and combining a holiday in Malta before or after the cruise as well, so that one indeed makes more out of the tourist.

In the following, the challenges arising from Malta’s geographical position regarding the euro market are juxtaposed with its unbeatable advantages and must be stressed on. We will take a brief glimpse at alternative cruise concepts. We will also discuss air route developments particularly for the North American market, which has been key in the cruise liner segment, pointing out technical and marketing issues, while also looking at some other more exotic source markets that could only eventually be of interest but still should not remain unmentioned.

Malta’s geographical position means that it is farther away from the core European source markets than Venice or Genoa for example. There, the transport of passengers from the German market is done cheaply with a transalpine coach shuttle service; the same should be the case with the other west continental markets. This could involve a night stop, but for some markets this is not even necessary as it is just a day’s drive to Savona, Genoa, or Venice from Stuttgart or Munich, Switzerland and so forth, though for longer feeds there is also the option to buy a flight ticket.

From Britain or North America it is shorter and consequently cheaper to fly to northern Italy or Barcelona, just as it is the case for traffic from the centre west continental markets. Cruises might not be budget-priced products but operators do not waste unnecessarily and the tourist does not see it. For example, if one says that Venice is an interesting place to include in an itinerary, with other interesting ports in the wider area too (like Dubrovnik), then there is a good argument. So, is it all blown to smithereens? No way!

The consequence must be that, at least as regards cruise and fly, with passengers starting and ending their sea voyage in Malta, either one can compete by being more competitive price-wise, or one must look at operations which makes the best geographic sense regarding the combination of port base and route to be operated by the ship, meaning that Malta is the most western EU point of the itinerary (or with the most western best airport/seaport combination). Malta also has a big selling plus; it has, architecturally, the most impressive sea harbour scenery in the whole Mediterranean if not the world, an airport very close capable of handling any aircraft, many sights in a compact area, and vast hotel capacity available. From the technical point of view, one could potentially have work carried out at the dockyard on site.

For the North American and western European market, Malta can be the rational choice as a departure point, as it would be the western point of the cruise and base of the ship.

So, essentially, for the above markets, this would mean that during the cruise the ship would primarily operate out of the Malta base in the eastern half of the Mediterranean – maybe eastern Sicily, some Ionian island, Crete, maybe Piraeus, an Aegean island, Cyprus, Egypt and back. Then Malta can compete as a relatively near airport. However, it does not make much sense to operate a route including more northern or western ports easier and cheaper to reach for passenger load swap.

As regards flight development, a cruise liner base would consequently bring far more passengers in the dedicated charter flight field. But it would also help carriers on a wide variety of current routes, and for places not linked by direct flights. Air Malta and Lufthansa and maybe also Alitalia, as the European network carriers, could be the links. All these flights could even have slightly improved loads.

Alternative cruise concepts

There is no need to present the classic cruise liner operations or also slightly different concepts such as the AIDA brand, which follows the same routings and premium onboard service; this will always be the lion’s share of the business. Grand Harbour is already on the top 10 cruise liner points in the Med at least as an itinerary item, and if Malta will primarily be looking at the classic giant operations. But are there also options in low-cost/short-haul cruises field that might be possible?

Mini cruises

Mini cruises have long been operated in Cyprus with not so modern and somewhat smaller ships doing a ‘tricycle’ from Cyprus to Israel or Syria to Egypt and back, or just exclusively to Egypt; a very short regional cruise that can be incorporated as part of a vacation stay. This certainly could be an option if one had a ship running. from Malta to Sicily to Tunisia and back, or Malta and around Sicily, or just over to Sicily. An interesting routing could also be Malta-Sicily-Gozo-Tripoli-Malta. Certainly, one would have to be careful as regards eastern Sicily day trips with Virtu Ferries, as this forms a substantial part of the business for the ferry company that provides an essential service for Malta. But one would also offer a cruise product that does not cost much and does not take that much time, so it leaves more holiday time to spend some bed nights in Malta itself. With Italy, Libya and Tunisia one has politically very stable neighbours as regards security, which is not the case with all Cyprus’ neighbours as regards longer-term planning for the cruise liner operator. The mini cruise product could eventually also be interesting for intercontinental tourists (PRC-Chinese or North American) who have little time but want to visit as many places as possible and have added a cruise to their trip. It should definitely be evaluated and when marketing Malta in Asia the cruises as such, so what one already has now should not be forgotten.

Low-cost cruises

Low-cost cruises, pioneered by the founder of Easyjet, got a lot of publicity across the continent but so far has not grow massively. Actually, the company that owns the ship currently operating for Easycruise – Easycruise Life Ltd – is registered in Valletta. Which of course does not mean much given the prominence Malta has in the ship registration field.

Compared to the beginnings of Easycruise, the quality improved with the new ship, actually a Soviet Black Sea ferry from the early 1980s that was converted in 1999. One aims at passengers who put more stress on the places visited rather than on a luxurious onboard experience.

Easycruise operates many comparatively short sectors in the Aegean, which gives passengers the opportunity to visit many small islands while keeping operating costs low. But if one does not have a large variety of itinerary points in the very immediate vicinity, this concept does not work.

As regards air services, while Easyjet does serve Athens though it is no major route, Easycruise also highlights many other carriers from across Europe, not forgetting to mention direct services from the US, as this is a very important source market for cruise liner tourism around the globe. Are such services an option for Malta?

Flights from North America – technical possibility vs. market risk

Looking back to the 1990s, Balkan Bulgarian flew twice weekly Sofia-Malta-New York using a Boeing 767-200ER, with Air Malta marketing seats. In summer 2000, Air Malta used an American Trans Air (ATA) Boeing 757-200 offering 210 seats on a trip-lease agreement, re-fuelling in Shannon, Ireland. The service was discontinued without completing the season due to a fat discrepancy between revenue and high costs.

One hundred and ten or 140 passengers means a bad load for a B757. But it can be a much better load for a B737NG or A320-series aircraft, which have a massively lower fuel burn per hour than a B757. At exactly the same seating capacity as the B757, an A321 burns 18 per cent less fuel per hour. The smaller B737-700/800 or the A319/320 burns less while maybe in practice generating equal revenue (seats sold), so lower fuel and crew cost and lower airport/air traffic control charges at equal revenue mean more chance to break even.

The direct line Malta-New York is 7,400 km. To The Azores, Malta-Ponta Delgada is 3,600 km, Malta-Lajes is 3,800 km. Distances from Ponta Delgada westbound are: Boston 3,800 km, New York 4,100 km Philadelphia 4,200 km, Baltimore/Washington 4,300 km; roughly 200 km less each from Lajes. From Lajes, Toronto would be 4300km and Montreal 3800kms. The Azores routing saves 200kms each way as regards Canada over routing via Iceland, although there are more alternatives enroute. Also, the Azores routings should all be within ETOPS-120, which means aircraft operate within 120 minutes of next airport; meanwhile, for both the A320 and the B737NG series, even an ETOPS-180 operation can be permittted. A technical stop only requires refuelling, picking up water/catering, and dumping waste, hence 35 minutes ground-time could work, particularly on these compact and unjammed airports; with smaller jets one can keep turn-around times at destination airports shorter than with large aircraft.

While they may not be the overwhelming majority, there are still quite a few long-haul tourist-focused flights carried out in Europe with narrow body aircraft, be it from Scandinavia or Italy to South/Central America with Airbus A321s or B757s, B737s flying from the eastern EU running to south-east Asia, or non-stops from Germany to Cap Verdes or from Sweden to Dubai. How about North American operators?

Miami Air International flies charter B737-800s over really long distances, a good share thereof for US forces. Air Pacific flies, currently not scheduled, B737-700/800s Fiji-Honolulu-Vancouver, an impressive 9,400 km, obviously for Canadian tourists, since the early 2000s. Actually, in the Americas firms like Continental, Southwest, or COPA take the 737s on really long non-stop sectors, some of them beyond 5000 kms per leg.

Step in at Gudja, step out in New York, and vice-versa. No rushing to gates or tiring waits, no transits. Just a 30-minute fuel stop in The Azores. Sounds nice, or? But that is just the technical side.

Organising and operating such routes is cost-intensive. Air Malta has code-shares with Lufthansa for key airports. Fares are not at all outrageously high. Air Malta might not like the risk. Passengers flying direct would go missing on the feeder flights to euro hubs. If Air Malta would not do it with an additionally leased plane, MIA and those only concerned with high arrival numbers might not be so happy, as one can either put a plane on such a mission occupying for roughly 24 hours or have short sectors which would bring in more arrivals.

Chances grow if one has

as many of the following

factors:

• a problem to keep aircraft occupied, or badly filled routes would be run with a smaller jet instead of a quite empty 140-180-seater to make them less deficitary while freeing capacity

• pricing were competitive towards current offers via hubs

• one has tour operator commitments

• one has really mostly additional traffic and not just re-channels hub services

Then there is the alternative of either operating with own aircraft (Air Malta’s 141-seat A319s have a range of 4800 kms at full payload, but maybe not so good unit costs), or lease a fit A320 or B737NG family aircraft, which when not out on long-hauls can do normal European or regional runs in between.

One could however also look directly at North American carriers who run such flights in conjunction with tour operators. Thinking of the US network giants is not realistic.

In any case, such direct flights would only be unbeatable on travelling time and convenience, not necessarily by fare.

American tourists (and Maltese Americans/ Canadians) dislike wasting time hanging around in airports. The East Coast is regarded as one of the world’s high purchasing power areas, with widely interested travellers. Tour operators and travellers prefer direct flights, even for a ‘fistful of dollars’ more.

But then there is the current economic crisis facing particularly the US and sure to have no small impact on the travel industry. While fuel prices have thankfully gone down, it remains cost-intensive; this is a fact. While one should definitely not keep the idea totally out of sight especially if one establishes a base for a ship that has strong US backing, at the moment the priority is probably to stabilise European routes. However, one should remain open-minded.

Emerging markets

One item could be the tapping of the Gulf State markets as regards the very affluent locals but also expatriates. One would have to see whether other eastern Mediterranean airport/seaports would be more practical (Cyprus, Greece, Turkey), but one still has an advantage here for cruises of the western Med. Dubai’s Emirates’ run is crucial. Options regarding additional flights from particularly Saudi Arabia and eventually Abu Dhabi were discussed by yours truly in The Malta Independent on Sunday of 9 December 2007, available online.

A few years ago, in a news item one read that roughly 50 tourists from the RSA visit Malta every week. More recently, di-ve.com mentioned that Malta has become a major point of attraction for South African emigrants who want to move to the EU. The somewhat risky security situation in RSA (very high criminality) is a major push factor for these emigrants, but also tourists like to have a break from this.

Malta has one of the shortest distances to the EU from RSA, and can offer both an onshore holiday and

a Mediterranean cruise, which would enable tourists to visit a number of countries along the way. Olympic used to fly (with a large Airbus A340) to Athens and while these flights stopped there should be some demand from South Africa for flights to a Mediterranean cruise liner hub even with a more modest capacity.

Currently, visitors to Malta first fly north to London or Frankfurt to then head south to Malta, which can mean adding at least (Frankfurt) an extra 6,200 kms on a return trip, with extra costs that all have to be paid for, or fly via Dubai, with the same many extra hours on diversion. Travel time via Frankfurt is 18 hours with fares around €2000 per person, tourist class.

Emirates fly from several South African airports with change of plane in Dubai to Malta and back for the Rand equivalent of roughly €550, though trip time is a staggering 21 hours. This fare should be limited to early bookers. But one would have to face such competition, which certainly is very strenuous for the passenger (travelling time), and unattractive particularly for the 50+ generation market, the major target group, but it still is unbeatably cheap.

If under these conditions one gets 50 tourists a week, would it be impossible that more might be interested if flight time was significantly shorter and the fare not much higher than the Emirates one? Would passengers and tour operators be ready to pay a premium over the Emirates low-fare for covering the distance in less than half the time with a direct (one fuel stop) flight?

Just technically, non-stop Johannesburg-Malta is 7000 kms. From airports seriously coming into question with the relevant infrastructure, one would have to stop over/refuel in Entebbe-Kampala/Uganda, meaning 4300 kms on the northern sector plus 3000 kms on the southern leg. Alternatively, there is Libreville/Gabon, with 3900 kms on the northern leg and 3600 kms on the southern one. Filling a widebody jet running non-stop is already very unlikely in North American sectors and clearly out of any realistic proportion here. With an A320 or B737NG family aircraft one would certainly keep marketing risk and trip costs low. If one were to run scheduled, one might add some passengers on seats that remained empty at least on the northern sector transiting via Malta from/to connected European hubs.

But, while technically it is unproblematic, no carrier should enter into such a thing without firm tour operator commitments. And these tour operators in turn also would be very careful before running into costly risks.

So it is here that eventual marketing would have to be started – just as with the more interesting North American market, which, despite all temporary difficulties, will remain a key factor for a future boost of Malta’s cruise liner business.