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Airservices Australia says airlines set to save millions from fee cuts.

Airservices fees cut
Photo: Airservices Australia

Australia’s air navigation service provider will reduce charges to airlines for the first time after a major and sometimes controversial cost-cutting campaign shaved $A170m off its bottom line.

Airservices Australia froze aviation charges in 2015 ahead of a major restructuring the following year that saw widespread redundancies among non-operational staff.

READ: Paris Air Show to be full of drama

It said aviation charges would be cut by two percent from July 1  as a result of the “headroom” created by the restructuring, which was designed to avoid cuts to frontline air traffic controllers and firefighters.

Airservices manages about 11 percent of the world’s airspace and the ANSP estimates the price cut will “result in multi-million dollar savings for Australia’s airlines and aviation industry”.

“We are passing on these savings to the aviation sector while not compromising operational safety and continuing to improve service delivery and invest in new technology to help the industry grow,” Airservices chief executive Jason Harfield said in a statement.

“Without the prize freeze and changes introduced under our efficiency program, customers were facing price increases of 15 percent from 2016, costing the aviation sector an extra $380 million over the period to 2020.

“I am very proud of the fact that Airservices is in a position to support the aviation sector in Australia, both through operational excellence and now through lower costs.”

Transport Minister Michael McCormack said the price reductions would go some way to keeping down the cost of operating aircraft in Australian airspace.

“Air travel for millions of Australians is not optional and the Liberal and Nationals government is committed to doing its part to keep aviation costs down,” he said.

However, the restructure has not been plain sailing and unions last year threatened industrial action over moves to cut entitlements.

There have also been claims by air traffic controllers that the system is stretched too thinly with high levels of overtime at Sydney threatening safety.

British Airways flies the flag but needs to hoist it higher

IATA
Photo: BA

British Airways is making sure the union jack continues to fly over Australia with a daily Boeing 777 flight to Sydney.

It is the last European carrier to serve Australia with its own metal and full points to it for hanging in there.

This may give British Airways an aviation empire upon which the sun never sets but it is a domain that could use some reforms.

These are in the pipeline in the form of a new business class due to arrive with the airline’s A350s but it will be some time before they work through the system.

READ: British Airways unveils spiffing new business class.

British Airways new business class
The New Club Suite will arrive with the A350 and be rolled out to other planes from 2020. Photo: BA

I have to confess to having a bit of soft spot for the British flag carrier: my first ever taste of business class was on a British Airways flight between Pittsburgh and London in the 1990s and, like many first times, it was a magical experience.

This was not just because of the plush armchair seats, good food and fine wine but because we saw the Aurora Borealis as we winged our way across the Atlantic.

Fast-forward to 2019 and magical is not a word I would use to describe the current BA Club World, although my flight from Sydney to London was not as bad as some had led me to expect.

Disillusionment started to creep in when I tried to reserve a seat on my two-stage trip from Sydney to London via Singapore. It simply hadn’t occurred to me that they would charge for seat assignment in business class.

On most airlines these days, where you sit is not such a big deal. On British Airways it is, the airline’s weird  2-4-2  business class layout, with half the seats facing backward, means some seats are worse than others.

I could reserve a seat, I discovered, but it would cost 174 euros – 68 euros to Singapore and 96 euros from Singapore to London.  This was despite being a Qantas silver frequent flyer.

As it turned out, the seats became free in the week before I traveled so I was able to secure forward-facing aisle seats.

Check-in at Sydney Airport was painless and the business class lounge is now in “the House” a mid-sized Etihad lounge that’s quite comfortable but on the other side of the terminal from the gate.

The odd configuration makes settling into the plane an interesting experience.

The strange sensation of sitting down and facing somebody forces passengers into exchanging pleasantries as they ponder social implications of raising the privacy screen.

British Airways
The seat was comfortable in recline but a bit too narrow and short as a lie-flat bed. Photo: Steve Creedy.

It turned out that nobody with whom I conversed particularly liked the layout but they considered BA’s business class better value than competitors such as Qantas and Singapore Airlines.

To be fair, the seats are not horrible.  They’re surprisingly comfortable in recline but too short and too narrow — just 20 inches wide and 72-73  inches long — for bigger people when it comes to lie-flat mode. No amount of brand-name linen cures that, although the decent sized pillow was welcome.

As with many outdated designs, storage is a problem.  There’s a drawer at foot level but it’s difficult to access, particularly when the fold-down footrest is deployed. The same goes for laptop power.

Deploying the footrest also blocks aisle access for the person occupying the seat in front of the one next to you.

British
Conflict alert: deploying the footrest blocks access for the outboard seat.

There’s a reasonably-sized swing-out touch-screen that proved easy to use and that allows you to access BA’s quite acceptable collection of films, TV shows and other options.

The headphone socket is next to the right shoulder and the noise canceling headphones were good enough that there was no compulsion to unpack the Bose alternative.

Good points included a nicely-designed tray table that pulled back for food service while allowing movement in and out of the seat in half mode and providing somewhere to put stuff.

An amenities kit from The White Company contained socks, a comfortable eyeshade, earplugs, a toothbrush and a useful pen as well as the usual moisturizer/lip balm pack.

We didn’t get a welcome drink after boarding in Sydney — but it would apparently have been Champagne Canard_Duchene “Cuvee Leonie” Brut if we had — and turbulence meant there was some delay in the follow-up, post-take-off libation.

When it did arrive it wasn’t quite what I’d requested and there appeared to be some difficulty attracting attention, including with the call button, to get it modified. I was impressed, however, by the cut glass/crystal tumbler.

British
I liked the glassware — and the Speedbird 100 centenary brew.

The menu offered four entrees, three mains, three desserts and a cheese board.

I opted for the Proscuitto, which was delicious but set me up for another disappointment.

The grilled beef was nuked in a way only the British can overcook things and brought new meaning to the term “well done”.

It was a sad accompaniment to luscious the Fortius Reserva 2010 Spanish wine  — one of the two red wine choices — with which it was washed down.

Partially offsetting the steak-based culinary crime was a very tasty antipasti plate towards the end of the flight that included a spiced chicken kebab, hummus, muhammara and labneh cheese.

This was accompanied by a lovely coconut and orange cupcake and black cherry pie tartlet.

British
The Prosciutto starter was delicious.

The staff were pleasant and attentive, chatting amiably with passengers, and after the initial drink mix-up, there was only one other hiccup.

That was partially my fault for not checking more closely the jacket they handed me and failing to realize it wasn’t mine when I left the plane in Changi.

The system caught up with me when I checked in at the lounge and my inadvertently purloined garment was replaced by the real thing.

Most people continue their Journey on the 777 after a short tech break but I switched to the A380 service leaving after a short break of just over two hours.

That gave me time to visit the BA lounge and have a shower. You can do that on the 777 service too but you have to be quick and hope the showers are not busy.

For reasons that are not entirely clear but presumably involve money, BA has opted to split its A380 across both levels.  I opted for the upper deck with a 2-3-2 seating configuration.

The seat seemed pretty much the same as the one in the 777 but the crew was older and a little more efficient.

No problems with the food on this flight — the grilled snapper in tarragon cream source was fine — and the traditional mixed grill breakfast was great. No one can do a hearty breakfast like the Brits.

British
BA does breakfast well. This is actually the Club Europe version.

Even so, I would foolishly go on to try steak again on one of my subsequent flights with much the same result as the first.

I did six legs with BA on this particular trip and my other observation is that Australians — and even Americans — may be a bit shocked by what passes for business class in the airline’s smaller planes plying routes in Europe.

It was essentially economy class with the seat next to you blocked off.

As far as I could tell, you get an inch of extra seat pitch which brings it up to 30 inches, compared with a barely humane 29 inches in Euro Traveller.

You do get food and drink and there was another of those great breakfasts on one flight to offset the pain of tight seating

Still, selling economy seats as business class is not really cricket in my view.

BA is in the process of correcting some of its pitfalls with a £6.5 billion investment program that is seeing changes to lounges and inflight product as well as new aircraft and routes.

Until those changes arrive, flying on the airline will remain a case of balancing value and product.

Microbes to help power All Nippon Airways planes

All Nippon fuel
Photo: ANA

Industrial pollution and microbes will help power All Nippon Airways aircraft thanks to a sustainable aviation fuel agreement with innovator LanzaTech.

All Nippon has signed an offtake agreement with LanzaTech that will deliver sustainable aviation fuel (SAF) from 2021 that can be mixed as a 50/50 blend with fossil fuels.

ANA plans to test the fuel on a delivery flight in the northern autumn.

LanzaTech’s process captures carbon-rich waste industrial gases from sources such as steel plants and uses anaerobic bacteria originally found in rabbit droppings to convert them into ethanol.

A process developed in collaboration with Pacific Northwest lab and the US Department of Energy then converts the ethanol to aviation fuel.

The Chicago-based company was originally founded in New Zealand and its innovative technology earned it a spot on CNBC’s 2019 Disruptor 50 list of companies deemed to be on the cutting edge of consumer, technology and business shifts.

READ: Cool United technology helps with tight connections.

ANA said a comprehensive search for the most efficient sustainable aviation fuel had resulted in it selecting LanzaTech’s unique product for its flexibility and high energy density.

The airline said it had signed a partnership agreement with Mitsui., which strategically invested in LanzaTech, in 2018, to jointly develop a sustainable aviation fuel manufacturing business that utilizes the Chicago company’s innovative catalytic technology.

“ANA has always been guided by our values, and our decision to transition to sustainable aviation fuel reflects how seriously we take our commitment to the environment,” ANA executive vice president Akihiko Miura said.

“Adopting this advanced fuel will allow us to reduce CO2 emissions and meet the ambitious sustainable development goals that we have set for the airline. At ANA, we seek innovative solutions to the most pressing problems, and we will continue looking for ways to reduce our ecological impact in order to create a better world.”

All Nippon did not say how much SAF it would take annually from LanzaTech but it is not the only airline with an interest in the technology.

In October 2018, Virgin Atlantic used fuel provided by the company to fly a Boeing 747 from Orlando to Gatwick.

Virgin called at the time for the UK  government to bring the technology to the UK and identified an opportunity to produce 125 million gallons of jet fuel per year.

This was enough to fuel all Virgin Atlantic flights departing Britain and save almost 1 million tonnes of CO2 annually, it said.

 

 

American launches new premium lounge wine lists

American new wine lists
Veloce Rosso is one of two custom-made wines available in the Admirals Club. Photo: American

Sampling more than 900 wines is not a job you usually associate with aviation but that’s the task   American Airlines master sommeliers Bobby Stuckey and Desmond Echavarrie set themselves over a  year.

Their mission: to create new wine lists at the US carrier’s premium lounges that will appeal to varying tastes and palates and, whenever possible, to provide local flavors at various airports.

That means bottles from the Finger Lakes region at New York’s JFK airport and Northern Californian wines at Los Angeles.

The pair’s latest wine list is being unveiled this month and includes two new custom-designed wines made exclusively for American by Stuckey and complimentary in the Admirals Club.

READ: American extends MAX cancellations to September.

Stuckey and his team worked with grape producers from Southern Italy to produce Veloce Rosso and Veloce Bianco, described as “aromatic bright and crisp”.

The new Flagship First Dining wine lists vary from port to port and include wines from Spain, South Africa, California, Italy, Argentina and France.

Stuckey and Echavarrie are among just 255 master sommeliers worldwide and each quarter they identify their top selections based on their notes and historical data on which wines have proved popular in lounges around the world.

Their findings are presented to staff to solicit feedback on which wines are most suited for the Admirals Club, Flagship Lounge or Flagship First Dining.

“We’re diligent in offering a broad selection of wines so that every wine drinker can find something they like when traveling,” says Stuckey.

“We look at it more like putting together a restaurant wine-by-the-glass menu. Customers can go for a great glass of Champagne or a full-bodied red and everything in between.”

American has won a number of awards for its wines including four gold medals in 2018

Mitsubishi eyes US market as it adopts ‘SpaceJet’ branding.

Mitsubishi
Image: Mitsubishi

Mitsubishi Aircraft Corporation has rebranded its regional jets as SpaceJets as it attempts to break into the US market with the first Japanese-built airliner in almost half a century.

The company announced its delayed MRJ90 would become the SpaceJet M90 while the former MRJ70 has undergone a makeover to become the SpaceJet M100.

It intends to debut the SpaceJet M100 cabin interior at next week’s Paris Air Show and to formally launch the program later this year.

Mitsubishi, which is also in talks with Bombardier to acquire the Canadian company’s CRJ regional jet unit, says it sees good potential in what it describes as an underserved regional jet market.

READ: Lufthansa takes inflight healthcare to heart

The former MRJ90 is on track for type certification and the company expects to deliver to launch customer All Nippon Airways in mid-2020.

The plane uses a Geared Turbofan engine and advanced aerodynamics to deliver what Mitsubishi claims will be industry-leading efficiency.

It will have the widest and tallest cabin in its class, offering what the company says is the roomiest economy seats and most overhead bin capacity.

i
Image: Mitsubishi.

Mitsubishi sees the US as a major market for the jet but, like other manufacturers, is limited by scope clauses in pilot labor agreements that place seat and maximum take-off weight limitations on regional jets that can be operated by the affiliates of major airlines.

In May this year, it announced it was opening a new US headquarters in Renton, Washington, and it has been conducting flight tests at Moses Lake, also in Washington.

The SpaceJet M100 will me more than 3ft longer than the abandoned MRJ70 but shorter than the SpaceJet M90.

The company says it has tweaked the M100 so it is “perfectly matched to the United States and global markets” and is optimized to be compliant with pilot scope clauses in a 65- to 75-seat, three-class cabin configuration.

It can also host an 88-seat configuration in other global markets.

“The Mitsubishi SpaceJet family represents our plan to redefine the business of regional air travel,” Mitsubishi Aircraft Corporation president Hisakazu Mizuta said in the rebranding announcement.

“This is a commercial segment where we see great opportunity. As we prepare for entry-into-service for the SpaceJet M90, we are also announcing the SpaceJet M100 – the result of our research and development during the past few years and the answer to the regional market’s current and future needs.

“These products mark our dedication to a segment in desperate need of change that will allow airlines to enhance the satisfaction of their passengers and significantly improve their business performance.”

Mitsubishi chief development officer Alex Bellamy said millions of people around the world relied on regional air travel.

“There is no reason that their experience as passengers should not be as good as or better than on a mainline flight,” he said. “The SpaceJet family provides the missing link in a curb-to-curb experience for the next generation of travelers while bringing a higher level of value to a neglected and undervalued market segment.”

 

Qantas offers grants with free regional flights

Qantas
Photo: Qantas

Qantas is offering free flights to regional communities as part of a $A5 million grants package over five years.

The $1 million in annual grants will be available to at least one Australian-based not-for-profit community group, charity individual or organization in each state or territory.

Organizations will need to be providing a direct service or benefit to regional Australia and grants will include a combination of flights, cash and marketing support.

The grants will be awarded each year and determined by a panel according to eligibility criteria.

“Unique to our grants program is the opportunity to access flights which we know are vital to connecting people and communities right across the country,’’ QantasLink chief executive John Gissing said during a visit to regional town Wagga Wagga.

“Whether it’s a health care program wanting to extend their services to a remote town, a local community center that needs funding to improve their facilities or flights for a student or sports group to travel with us to attend a training course in another city, these are the sorts of initiatives our program is designed to support.

The ultimate objective is to enhance the lives of people in regional communities.”

Gissing said he expected the five-year program to help a significant number of people.

“We’ll be looking for applications that can demonstrate measurable impact and innovative ways to benefit regional communities,” he said.

Applications close August 30 and the successful and successful the recipients will be announced in October.

The announcement comes after a recent Senate report into rural air services labeled regional Australia as one of the most expensive areas in the world in which to fly and s recommended a review of domestic airfares.

READ: Report calls for action on expensive regional airfares.

The report cited a 2017 World Economic Forum report into travel and tourism competitiveness which found Australia to be the 12th most expensive country in which to fly out of 136 ranked.

Qantas says its regional initiatives include $A3 million in drought relief efforts, discounts of up to 30 percent for residents and the Qantas Group Pilot Academy due to open in Toowoomba later this year.

The airline group estimates it contributes more than $5 billion to the economy in regional Australia each year and supports more than 40,000 jobs.

 

Virgin Atlantic, Virgin Australia seek to strengthen ties

Virgin Australia

Virgin Atlantic and Virgin Australia are seeking to strengthen their ties through a long-term co-operation agreement on services between the UK/Ireland and Australia.

The airlines currently codeshare between Australia and the UK/Ireland through Los Angeles and Hong Kong and on Virgin Australia domestic services.

They are seeking authorization from the Australian Competition and Consumer Commission to deepen their relationship through the two hubs as well as any future mutual connection points.

Virgin Australia says it needs the agreement to support its Melbourne-Hong Kong and Sydney-Hong Kong services in its battle against the dominant airlines, oneworld partners Qantas and Cathay Pacific.

READ: Qantas, American promise lower fares after joint venture approval

It recently won a victory on the market with a decision by the International Air Services Commission to reject a Qantas-Cathay codeshare proposal.

More generally, the Australian carrier says in the June 3 application that the strength and reach of its international network are critical to its ability to gain access to the higher yield corporate and premium leisure travel business in competition with Qantas.

The conduct for which authorization is sought includes joint pricing, inventory management, scheduling coordination, network planning and marketing.

The two also propose to cooperate in relation to product alignment, airport operations, joint procurement and tenders for corporate contracts.

This includes extending their existing codeshare and frequent flyer agreements.

The competition watchdog has called for submissions by June 21 on the airlines’ request for interim authorization with a draft determination planned for September this year and final ruling tentatively expected in November.

The two Virgins argue to the agreement will allow them to create more competitive connecting international services between Australia and the UK/Ireland, including a “compelling Virgin-to-Virgin brand proposition”.

“The Applicants will better utilize each carrier’s home market strength, implement improved pricing and inventory management strategies and optimize their airport operations in Hong Kong and Los Angeles,’’ they say in their application.

“The Applicants project that these service enhancements, together with loyalty and other product initiatives, will attract further passengers and better support existing and future services from Australia and the UK for Virgin Australia and Virgin Atlantic respectively.

“This is crucial to the sustainable operation of Virgin Australia’s services between Australia and Hong Kong.”

The two airlines have a combined market share of less 3 percent on the highly competitive Kangaroo Route compared to a 40 percent share held by the Qantas-Emirates alliance.

They operate complementary route systems and say their proposal will result in increased choice for passengers.

Benefits are expected to include more competitive pricing, product enhancements, improved schedules and “valuable improvements in reciprocal frequent flyer arrangements, lounge access and status recognition”.

 

 

Qantas to start Darwin-Broome flights

Qantas Broome Darwin
A QantasLInk F100.

Qantas Thursday announced a new route from Darwin to the West Australian resort town of Broome as it inked a $A4.5m marketing agreement to promote tourism in the Northern Territory.

The new route, operated by a QantasLink  Fokker 100 aircraft, is part of a restructuring that will see the airline downsize its Boeing 737 service between Darwin and Alice Springs.

The airline said the downsizing of the Darwin-Alice Springs route to the 100-seat F100 came after the B737 which had operated it for the last two months proved too big for the route.

However, it noted the change made possible the three-times-weekly Broome flight.

READ: Report calls for action on expensive regional airfares.

The flights will start from October 27 and will maintain a double daily frequency on Darwin-Alice Springs “for the majority of the year” to better match demand on the route. Qantas is offering $A199 one-way promotional fares to kick off the route.

“This Broome route is the fourth new route the Qantas Group has launched in the Territory in the past year – Qantas launched two new routes to Uluru from Darwin and Adelaide in March and Jetstar launched Brisbane to Uluru in August last year,” Qantas Domestic chief executive Andrew David said.

The new marketing agreement represents an increase of almost 20 percent on the deal struck in 2016 and will focus on promoting the NT across Australia and in key markets such as the US.

It will include advertising in key markets, collaboration on media and industry initiatives and promotion of special fares and major events including Parrtjima, the Darwin Festival, Bruce Monroe: Tropical Light and the Field of Light exhibition.

The Territory will also be promoted across the Qantas digital platforms and to its 12 million frequent flyers.

“Qantas has a deep history with the Northern Territory, and we understand the key role we play in bringing tourists and business travelers to the region which in turn drives the local economy,” said Qantas Group chief marketing officer Stephanie Tully.

The airline has also extended its resident fares program, which offers discounts of between 20 and 30 percent off non-sale fares, to residents of Yulara and surrounding communities in the south of the territory wanting to travel to Darwin. They join residents of Alice Springs in the program.

Resident fares came in for criticism in a recent report into regional aviation because of the complexity of eligibility criteria.

In the case of the Yulara region, the airline said each resident could use the discount on up to 12 personal trips each year to save at least $A122 off a return fare.

Qantas and Jetstar operate up to 288 flights in and out of the Northern Territory each week, offering more than two million seats a year in both directions.

The group says it supports more than 400 local jobs and contributes more than $A150 million to the Territory’s economy.

 

 

Delta faces fundamental questions about amenity kits

The most eyecatching thing about the business class kits are the paper seals. Image - Delta

It’s 2019, and airlines’ ecological credentials are under the microscope and Delta Air Lines is among those responding.

Aside from the ongoing question of emissions-based taxation, single-use plastics and the amount of waste generated onboard the aircraft are a hot topic, and some airlines are doing their best to stay ahead of this curve.

READ: Lufthansa takes inflight healthcare to heart.

Delta, for its part, says it’s bang on trend with new amenity kits that swap the plastic bag that used to wrap them for a paper seal, saving what the airline says will be a remarkably precise “30,951 pounds of plastic” from ending up in landfills.

That is, in the aviation equivalent of the swimming pool/bus/747 scale of measurement, approximately one Bombardier (soon to be Mitsubishi?) CRJ-200.

The new Tumi-branded kits themselves are… fine, I suppose.

I find it difficult to get excited about boring light grey or boring black on boring medium grey, and it’s a weird choice for Delta’s very red-white-and-blue Delta ONE cabin color schemes.

Trying to find something positive to say about it, it seems that it’s “designed to fit a small tablet”, which is a point in the reusability column.

It’s particularly odd in juxtaposition with the economy class handouts — offering a moist towelette, sleep mask and earplugs in regular economy, while the buy-up extra-legroom Comfort+ seats get a dental kit too — where Delta has used fun customer photos (curated through its #SkyMilesLife hashtag) for the prints on the disposable packaging.

And there’s the greenwash rub: the vast majority of the passengers on the plane — that’s 74% on the A350, 226 in the main cabin vs 32 in Delta ONE and 48 in Premium Select — will be throwing away a disposable plastic wrapping.

I note also that while the Delta ONE business class kit toothbrush looks like it’s made of some eco-friendly recycled material, the toothbrushes down the back are good old single-use disposable plastic.

And with a series of frankly boring amenity kits — containing plastic-based eye masks, socks, toothbrushes, toothpaste tubes, mouthwash sachets, hand sanitizer, moist towelettes, earplugs and so on — it feels like the leave-behind rate will be fairly high. I can’t help wondering if there’s a better way to do this.

It doesn’t feel like automatically handing out every piece of kit to every passenger on every flight is an environmentally friendly way to do things.

Does it make sense to force passengers who might only use the moist towelette on a day flight to open up a full amenity kit, with its full carbon footprint?

In economy, could the kits perhaps be packaged in paper rather than single-use plastic?

Could the toothbrush kits be made available in the lavatories or at a self-serve station for those passengers who want to brush their teeth in whatever’s contained in the onboard water?

Could the moist towelettes, eye masks and ear plugs be passed out in a bowl or tray, as I experienced on an Air Dolomiti flight earlier this year?

In premium economy and business, could this perhaps be an opportunity for a positive crew interaction, leveraging the higher concentration of flight attendants in the front cabins? (“Thank you for flying Premium Select! Would you care for a moist towelette?”)

Could the bags be offered via a three-minute cabin walk-and-smile? Could the various items within be similarly passed out? Could a self-service space be set up in the galley?

Here’s the thing: just thinking of my own preferences, I always carry a pen, hate airline socks, never use an eye mask. use earbud earphones instead of earplugs, and perhaps use a dental kit on one flight out of three, preferring instead to munch my way through some chewing gum to freshen my breath and use my own toothbrush and toothpaste when I get where I’m going than brush my teeth in an airline lav.

And it’s not like I don’t have a closet shelf half-full of amenity kits.

But I’m always grateful for a little bottle of hand sanitizer to pop in my pocket, find a bit of lip balm helpful for a long flight, and appreciate a hand cream on a long flight on an older aircraft (which Delta, of course, has in spades).

Delta could dramatically cut the weight, cost and complexity of provisioning a kit by simply offering me a little bottle of hand sanitizer, lip balm and hand cream — while at the same time my happiness by making two of each of these things available if I want them in case I might like a spare.

Rethinking the way airlines do amenity kits will take effort. But the current zeitgeist makes it the perfect time to try.

Ryanair plans expansion through Maltese start-up

Ryanair

European low-cost juggernaut Ryanair Holdings plans to grow its Mediterranean presence after agreeing to buy Maltese start-up Malta Air and transfer across six Boeing 737s.

Malta Air will join Buzz (Poland), Lauda (Austria), and Ryanair (Ireland) in the low-cost group’s growing roster of carriers after the planned completion of the transaction at the end of the month.

Ryanair said the move would give it access North African markets and it planned to boost its Malta-based fleet to 10 aircraft within three years, creating 350 jobs.

Media reports suggested the Maltese government retains a “golden share’’ in the start-up giving it a veto on major changes.

The switch of the six  B737s based in Malta to the new acquisition will mean 200 Malta-based crew will move to local contracts paying Maltese taxes.

Ryanair also plans to move more than 50 Ryanair aircraft from France, Italy and Germany to the Maltese registry in coming years.

READ: Passengers urged not let MAX problems undermine trust in aviation.

This will allow crews to pay their income taxes locally in France, Italy and Germany —  a move in keeping with worker demands that they be allowed to pay taxes in their home countries instead of Ireland.

The deal was welcomed by Malta’s Tourism Minister, Konrad Kizzi.

“The relationship between Ryanair and Malta has evolved into a successful collaboration,’’ Kizzi said in the announcement.

“We welcome Ryanair’s commitment to operate and grow a fully fledged Malta-based airline which will contribute in a large way to the country’s development.”

Ryanair boss Michael O’Leary said he looked forward to working closely with Maltese authorities.

 “Malta Air will proudly fly the Maltese name and flag to over 60 destinations across Europe and North Africa as we look to grow our Maltese based fleet, routes, traffic and jobs over the next three years,’’ O’Leary said.

“Ryanair’s continued partnership with the Malta Tourism Authority will help drive forward the vision of Prime Minister Muscat and Minister Mizzi to grow year-round connections to all corners of Europe which will support increased tourism, business and jobs in Malta.”

One downside of the deal is that a similarity in names could cause some confusion among travelers with Malta’s existing state-owned airline, Air Malta

 

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