vendredi, octobre 20, 2006

Public Service Carrier

“Air Malta is ready to compete against low-cost carriers as long as they compete on a level playing field.” - Investment Industry and Information Technology Minister Austin Gatt.

The referee calls the shots. The referee sets out the rules. In this case the rule is that the LCCs have to play with a handicap. What we need to understand is how denying access to all routes for LCCs is considered a "level playing field". What we really need to know is why Air Malta benefits from the description of being a Public Service Carrier - supposedly at the service of the Maltese travelling public, serving routes where the Maltese want to travel - when 80% of the tickets sold in its last marketing campaign were sold abroad. That means that only one out of every five persons travelling on Air Malta is a Maltese Citizen using this Public Service. We will have to just sit and hope that by June 2007 - the date set by the magnanimous PN government for the cutback on the departure tax - these statistics will shift in favour of better use of the public service by the public it is deemed to serve. There are too many contradictions in the current policy.


Public Service Carrier: This concept encompasses the view that the carrier actually provides a service that would otherwise not be provided since it is not commercially viable. It allows a level of protectionism in favour of the carrier in order to allow it to minimise the damages of its operating in an otherwise unprofitable market.

Level Playing Field: A market condition that ensures that all participants are subject to the same rules.

Low Cost Carrier: Airline operating on low costs. This is generally thanks to a special modus operandi like out-sourcing of services, cutdowns on free inflight service and special ticketing systems (such as non-paper tickets).

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