vendredi, juillet 14, 2006

Hey Austin... Still don't like Ryanair?

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It's even more mind-twisting than the heaviest sudoku. It's more complicated than a Sunday Times Crossword published with the wrong accompanying clues (I hate it when they do that). It's a gordian knot of the worst kind and it really should not be that way at all. The more you read about the Low Cost Carriers (or as Bocca likes to put it Cheap'n'Cheerful flights) saga, the more the Maltese government's position becomes untenable.

Fact 1
Over the last few weeks the European Parliament has agreed on a new jet-fuel tax (dubbed 'green tax') that will in the future hit all flights in Europe (including LCCs). The result is obviously that all flight prices will go up (by about €100). The Maltese, already disadvantaged as it is, will maintain the same disadvantageous position, only that it will be relatively more expensive than before to travel vis-a-vis the affordability that an average wage in Malta allows. The disadvantage becomes ginormous when you think that Maltese travellers have NO access to LCCs - so the relatively cheaper is relatively non-existent.

Fact 2
Yesterday the Times reported that over the last two years Air Malta has lost 28 pilots to airlines that can cough up more cash (see Emirates and other oil-rich country carriers). The news was peppered with Interesting Facts (capitalised as the Goons would) among which we find that the annual wage of an AirMalta pilot is at least one third of that of the poaching airlines*. I would assume that Air Malta pilots get good training that also costs the national airline money - only to scoot off to a better paying airline once the training is finished and contractual obligations are fulfilled. Which means that Air Malta needs new pilots fast. Now I don't know about you but I have an ugly feeling about an airline that recruits pilots quickly. You know what I mean? The unsustainability of Airmalta continues to prove an unequivocal argument that we are protecting the unprotectable.

Fact 3
And then came TUI. For those of you who have never heard of it, TUI is one of the major tour operators in Europe (linked to Thompson Holidays). TUI has just struck off a number of Maltese Hotels from the Summer 2007 catalogue (see report on Now that is no small news story. TUI does not only service the UK- It is a big operator in the BENELUX and France. My holiday in Cuba was a TUI package - when you choose your holiday you get a catalogue with a choice of hotels and you can choose from three to five class and more. All hotels are vetted and guaranteed by TUI - I can safely say that persons travelling from the continent are strongly influenced by the choice of tour operator. Losing a TUI backing is not a joke.

In the letter that TUI sent to the Maltese hotel managers informing them of its decision it said:
“The market in which Malta operates has changed dramatically in recent times. Changes such as the needs of our customers, the advent of low cost airlines in other areas and new technology have created the need for us to reshape our business and subsequently some of our programme in Malta will be dropped for the following summer.” " Ooops. Remember that incredible Air Malta report that was analysed on j'accuse a few days ago? Remember the doom and gloom of the dependence of the Hotel industry on an LCC?

Well who's laughing now? We are in the ridiculous situation of having our hotel industry suffer because we sadistically choose to exclude LCCs from our market to protect a dying horse. We are now semi-officially the Non-Low Cost Country. Somehow any remnants of prestige that this monicker could have afforded the Sunny Happy State vanishes away with the gloomy forecast of no tourists and no travelling that lies ahead.

So Austin... still don't like Ryanair?

* an Air Malta captain can earn up to Lm26,000 annually. Ryanair pays its captains with similar experience Lm62,000. (just switch the first two digits!)

7 commentaires:

Fausto Majistral a dit…

Over the last few weeks the European Parliament has agreed on a new jet-fuel tax (dubbed 'green tax') that will in the future hit all flights in Europe (including LCCs).

And then we'll see if you lash out against this green tax as strongly as you do against the departure tax.

Jacques René Zammit a dit…

There is a reason why I will not. The green tax is across the board. ALL airlines from ALL nations will increase at the same price. While there is space for arguing that it is a bit steep, it is ALL citizens of the EU that are equally hit.

On the other hand the Maltese departure tax combined with the airport fee is among the highest in Europe especially when one considers the low purchasing power of the Maltese citizen.

Therefore comparing the 'green tax' to the maltese departure tax would be like comparing Christian Democrat Principles to the Nationalist Party style and politics - a bit like the proverbial "hass mal-bass@ don't you think?

Fausto Majistral a dit…

So let's see if I understand. Jacques is Maltese. He departs from Malta and pays a hefty departure tax. Jacques, rightly so, hates it. The tax digs deep into his pocket and possible infringes his right to free movement.

However, Jacques le Maltais departing Malta will acquiesce if another Jacques, a Frenchmen departing Paris gets to pay too. Call it departure tax, call it green tax, it digs deep into Jacques le Francais' pockets and, possibly, infringes his right to freedom of movement.

But Jacques le Maltais doesn't mind: Schadenfreude may be a German word but the phenomenon is unmistakably Maltese.

Fausto Majistral a dit…

Not to forget that departure tax we got thanks to the Nationalist Party and we'll get the airline eco tax thanks to the European Green Party, with whom our own Greens were supposed to have a lot of leverage.

Four legs good, two legs bad, isn't it Jacques?

Jacques René Zammit a dit…

Your grasp of the situation verges on the intentionally naive.

Of course ideally no taxes would exist. The taxes at European Level have their pros and cons... they might make travel more expensive but are intended to keep cleaner skies.

The Maltese tax is OVER AND ABOVE the carpet tax across Europe. Compared to similar taxes in other countries it remains prohibitive, irrational and unjustified - particularly due to its inhibitive effects on free movement of maltese citizens.

Your Francais vs Maltais theorem ignores that fundamental point. I am quite sure that this ignorance is purposeful and purposive. The logical fallacy that Jacques doe snot mind because it deigs deep in the pockets is incredibly laughable.

My point has always been that travel should reflect basic competitive prices considerting all market forces (including possibly an eco-tax that hits on everyone equally). Once you introduce the additional burden of the exaggrerated departure tax it no longer remains dependent of competitive forces.

In simple words, if travelling from Malta were to become more expensive simple because a new EU -wide tax has been introduced (and is equal in all countries) Jacques le Gozitain would be pissed off about having to pay more but would see it as a rational justification. On the other hand if travelling from Malta is simply more expensive because of a set of unilateral taxes and charges that make it expensive for him to travel ONLY BECAUSE HE LEAVES MALTA then Jacques le Gozitain is not only pissed off but he will definitely not vote for whatever government is perpetrating this crime - no matter how many apologetic opinionists / bloggers try to pepper the argument with deviatory arguments in search of another scapegoat such as for example... the greens.

(and finally. Since when does the Green party have enough clout to decide on its own the Parliamentary policy? Since when does not that great party called EPP not have any say? Who do you think you are kidding Mr Majjistral?) :)

Fausto Majistral a dit…

Oh so now I get it. You'll be happy if next morning Gonzi wakes up calls departure tax an "eco tax" and claims that it is levied not for leaving Malta but because of GHG emissions.

With that the irrational becomes rational, the unjustified becomes justified, the prohibitive becomes encouraging. Not to mention how the loathed Nationalist becomes the sustainable Green.

I'm impressed -- and please take this as a compliment -- how easy it is to make you happy.

Please note that the Maltese departure tax is not "over and above the carpet tax in Europe"; the latter is still a proposal and, indeed, a name change, some tinkering with the details and lowering the rate would probably bring us in line with the recommendations of the report -- before everyone else.

Jacques René Zammit a dit…

No. You still don't get it. And I'd be happy to explain it calmly over a coffee after the 28th ... you can wear a mask if you like - or you can come dressed up as Gonzi.

The basic problem remains the non-level playing field. Let us say there is currently a basic cost for airlines in Europe... Malta's costs are BASIC + 10 while the rest of Europe averages BASIC + 7. The new euro tax (whether it were eco or otherwise) only adds on the BASIC side of the equation (and that is a separate discussion)... which leaves Malta disadvantaged both relatively (as it always was) and individually (because of the increase in the basic side).

As for the renaming of the tax... I should hope so... the least the government can do is to absorb the obscene disparity between itself and the rest of europe. Shoudl that happen it would mean that Malta would end up with approximately (but not completely) the same prices. Only missing link: RYanair & co.