The impact of low cost airlines in the aviation industry on the Maltese tourism market : demand on Malta as a tourist destination as a result of introduction of low cost flights to Malta

Abstract

The aim of this research is to investigate what is the influence of the low-cost airline introduction to Malta as well as to outline the relationship between availability of low-cost flights to Malta and demand to Malta as a destination.

This topic came to me when I was reading an airline magazine with flight statistics, and I have noticed that the more connectivity low-cost airlines provide to Malta, the more incoming tourism occur, and it was not clear for me, whether it is a result of availability of low-cost flights or availability of direct flights in general.

There are several findings which were found during the research: 1. The tendency is that in future low-cost airlines most likely will dominate the inbound flow of tourists to Malta.

2. The usage of full service carriers when it comes to flights to Malta is slowly but steadily decreasing as well as usage of LCCs is increasing.

3. Hotels are gaining the most among other stakeholders who are affected by the introduction of low-cost airlines.

4. Air Malta is suffering indirectly from introduction of LCCs as well as benefiting indirectly from LCCs

5. Demand on Malta depends on availability of flights in general, not just on availability of low-cost flights, but the number of connections which are provided by LCCs is rapidly growing, which means that indirectly demand on Malta as a destination depends on LCCs.

To conclude, for this topic to be proved, there has to be a much deeper and bigger research, though with this research’s findings there are several conclusions to be drawn: with that tendency, Malta can become to dependant on LCCs, as if the usage of FSCs, especially of Air Malta, will continue to decrease, then LCCs will have a big percentage of market share. So, if LCCs in future, with this tendency, will decide to leave the market (although it seems to be not possible) Malta will suffer and the supply and demand will be recovered, as at the end of the day as per economic theory if there is a demand supply will follow, but the question at which cost this recovery will be.