Report: Invigorating Investment and Growth: The Economist’s Business Roundtable with the Government of Malta

Media: Country Report

Sector: Country

Publication Date: February 2014

Aviation Hub

Spreading the Wings

It is hard to think of an industry for which Malta is as promising a location as it is for aviation.

Situated right at the centre of the Mediterranean, the island has already attracted some 150 aircraft to its register while hosting a number of flight training organisations and a vibrant maintenance, repair and overhaul sector. “But we want aviation in Malta to be more than that,” Malta’s former Tourism Minister Karmenu Vella said. He said that the Maltese Government intended to support the private sector to expand in areas such as aircraft management, sales, charters and leasing facilities, financial and legal aviation services, repair and maintenance, call-centres, back office and shared services operations. Other markets that were set to take-off include the management of technical documentations, refitting and refurbishments in addition to research and innovation in aircraft technologies and avionics, the former Minister said. Malta would continue to be the place where decision makers are easily accessible, where bureaucracy is the exception rather than the rule, where the regulator is also there to facilitate and not just to regulate, the former Minister explained. “We encourage anybody who would like to increase activities in the aviation sector here in Malta, be it training, be it maintenance, or aircraft operators in general,” George Borg Marks, Director General for Civil Aviation at Transport Malta, added.

Training & Innovation

High-Flying Talent

When it comes to developing top talent for the aviation industry, Malta can shout louder than most, with the Malta College of Science and Technology regularly delivering aircraft maintenance service training courses.

Malta’s strong emphasis on education in this sector was instrumental in bringing Lufthansa Technik to the island. “It was very important to have the right people here on the island – people who are hands on, English speaking and have technical skills,” Stephan Drewes, CEO of Lufthansa Technik Malta, said. But efforts now needed to move into higher gear, and Drewes stressed the importance of life-long learning. “We don’t know what aircraft will be flying around in 10 years’ time. This means our people need to embrace continuous learning.

“Changing regulation over the past years has also created demand for more aviation expertise as well as staff, including aircraft managers, airport personnel, airline operators, aircraft engineers and pilots,” Captain Ray Zarb said. Captain Zarb, who is Chairman of the Falcon Alliance Group, which comprises a pilot academy as well as an aviation engineering company in Malta, also highlighted Malta’s potential for pilot and crew training. He mentioned that airport manufacturer Boeing believes that airlines would need nearly half a million new commercial airline pilots to support the expanding demand.

Air Traffic

Opening New Routes

After a number of difficult years, with shrinking passenger numbers and tight profit margins, the global aviation industry is looking forward to a period of growth.

The latest forecasts for Europe indicated that the number of flights will increase from 10 million this year to some 15 million in the next 20 years, Malta’s former Tourism Minister Karmenu Vella said. He added that current estimates showed that Europe, the Middle East and Africa already made up some 25 per cent of the aviation activity worldwide and “with Malta being smack in the middle of all that activity, one can only look towards the future with a positive outlook”, he concluded.

Joe Sultana, Director Network Manager at Eurocontrol, the European Organisation for the Safety of Air Navigation, said Malta had a huge opportunity to develop new systems for air traffic

management. The EU was currently establishing the Single European Sky, unifying national air traffic and enabling EU air traffic controllers to manage increasing amounts of traffic with greater safety, lower costs and a reduced environmental impact. In an effort to set up new routes, there were also proposals to expand the Single European Sky, beyond Europe, including countries in North Africa and the Near East. According to Mr Sultana, Malta was strategically placed to lead this initiative and “extend the Single European Sky to include all these states at our interface to the south in order to make air traffic management more efficient.”

Private Jet Services

Gaining Ground

The mood in the private jet industry is upbeat as jet travel is set to soar in the coming years, and Malta is ready to unleash business aviation’s full potential.

“While Malta may be a minor aviation market for the world’s airlines, the country is disproportionately valuable as a location for the aviation industry, and most notably for private jet services,” Malta’s former Tourism Minister Karmenu Vella said. He added that private jet services were generating some €20 billion worth of travelling, employing some 170 thousand people around Europe and creating some €9 billion worth of aircraft manufacturing. “This industry is rapidly growing, and in the next 10 years, it is estimated that around 10 thousand new business jets, worth about $250 billion, will be delivered.” For these reasons, Karmenu Vella said, the government was collaborating with the airport to develop and provide a business aviation terminal specifically for private jets. “We also recognise the fact that the set-up up at the civil aviation directorate needs to be beefed up to meet not only today’s challenges but also tomorrow’s opportunities.”

According to John Matthews, Chairman of AirX Malta, Malta’s regulatory framework for the sector was already outstanding. Matthews moved his companies from Germany and Austria to Malta, establishing Malta as headquarters for AirX. “We found it unique to have a civil aviation directorate with which we can communicate on a commercial level while it is overseeing safety and awareness at the same time.” Mr Matthews said since relocating to Malta one year ago, his company had flown 3,700 high-net-worth individuals and had completed some 700 to 800 flights. “We couldn’t do that in any other EU state other than Malta because it would be impossible to put the paperwork through in such a speedy time while still maintaining compliance with all the necessary regulations.”

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