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in Air Transport / Features

Maltese ready to cross a new bridge

Posted 21 May 2019 · Add Comment

Libyan-owned Medavia has a varied business model encompassing charter operations, wet-leasing, and maintenance, repair and overhaul (MRO) services at its Malta hub. Now chief executive, Rammah Ettir, is looking to add scheduled flying to the mix. Martin Rivers reports.

 

Until 2014, when Tripoli International Airport was razed to the ground by warring militias, Mediterranean Aviation Company Ltd (Medavia) conducted most of its aircraft maintenance work in Libya’s capital.
Relocating its operational facility to Malta, the Mediterranean island situated 350km north of Tripoli, was a difficult but logical response to the security crisis.
Medavia had been set up in 1978 by the governments of Libya and Malta, and the European island already hosted its management headquarters as well as a base maintenance station.
Despite losing one aircraft to the violence and sacrificing much of its revenue for evacuation flights, the company has adapted well to the challenges of recent years.
Financial losses coinciding with the outbreak of Libya’s civil war were reversed and Medavia now has more requests for work than its 210 employees can accommodate.
Alongside technical arm Medavia Technics – which has European Aviation Safety Agency (EASA) approval for Part 145 maintenance, Part-M continuing airworthiness management organisation (CAMO) and Part 21J design work – Medavia Operations Ltd (Medops) is thriving in the charter and wet-lease market.
Medops currently has one Bombardier Dash-8 300, one Dash-8 100 and two leased Beechcraft 1900s in its fleet. Another two aircraft – a Dornier 328 and a Cessna Citation – are under management for third-parties, while four Bombardier CRJ-1000s are operated on a wet-lease basis for Binter Canarias. The CRJs belong to Air Nostrum, the Spanish regional airline that bought 51% of Medops in 2017.
Medavia’s chief executive, Rammah Ettir, admits that the Air Nostrum partnership came about by necessity rather than design.
The Spanish firm only stepped in when the European Union (EU) threatened to revoke Medavia’s air operator’s certificate (AOC), arguing that it violated the bloc’s foreign ownership laws for airlines. That reflected an earlier decision by state-owned Air Malta to sell its stake in Medavia – a move that left the Libyan Arab Foreign Investment Company (LAFICO), a subsidiary of Libya’s sovereign wealth fund, as sole owner.
“The main driver really was to comply with the European regulations,” Ettir confirmed. “It was not a commercial transaction; we were obliged by law to change the ownership.
“But [the reason] why we went to Air Nostrum [specifically] was commercial. We saw opportunities with Air Nostrum. We saw that there are strategic benefits, that we can complement each other in many areas. In actual fact, the first time that we came across Air Nostrum was during our strive to add the ATRs to our technical capabilities.”
As well as pursuing more wet-lease and maintenance contracts with its Spanish partner, Medavia is now doubling down on the charter side of the business.
Libya, which is still home to a quarter of its workforce, remains an inevitable focal point.
Medops is best known for operating five weekly charter flights from Malta to Mitiga International Airport – now Tripoli’s main gateway – on behalf of Maltese travel agencies. That route, which is served by both the 19-seat Beechcraft 1900 and the 37-seat Dash-8 100, has become a lifeline for Libyan travellers.
“It’s the only channel between Libya and the European Union at the moment,” Ettir noted, citing the EU’s ban on Libyan carriers entering European airspace.
Other, less frequent charter flights are also operated to Benghazi in the east and numerous oilfields in the southern desert.
Hampered by poor security, political instability and financial uncertainty, Libya’s own airlines have struggled to stay airborne. State-owned Afriqiyah Airways and Libyan Airlines provide most of the seats in the market, while privately owned Libyan Wings, Buraq Air and Rahila Air also have scheduled operations. Tunisia and Turkey are the main overseas destinations.
Five years after the assault on Tripoli International Airport, no foreign airline has yet resumed flying to the country – isolating Libyans precisely when their need is greatest.
That explains why Ettir classifies the Malta-Mitiga link as a “humanitarian” service that is helping Libya “get back on track”.
Even without direct competitors, though, he believes there is limited scope for adding capacity at present.
“The demand is increasing, and we have responded to that. The number of flights has increased. But it still doesn’t justify having a bigger aeroplane,” he shrugged. “The demand on this operation is very linked to the economic conditions in Libya, the exchange rate, and also to the visa requirements. It’s a little bit easier for the Libyans to travel, for example, to Tunis or to Istanbul than to come here to Malta.”
As well as flying to Mitiga, Medops is now active in a range of specialist charter markets.
The airline’s historic business model focused on charter flights for the energy sector – catering both for Libyan oil companies and, more recently, western firms that had been building up a presence in the country.
That changed when the overthrow of Muammar Gaddafi, Libya’s former ruler, prompted rival militias to battle for control of the state’s assets in 2011, kick-starting the civil war. Few western oil companies now venture into Libya for fear of violence and kidnappings. As a consequence, the energy sector accounts for barely a quarter of Medops’ charter business.
“In 2011, after the Libyan revolution, we opted to diversify because the oil companies that we were serving in Libya pulled out and their operations were very low,” Ettir affirmed.
In their place, humanitarian flights on behalf of non-governmental organisations (NGOs) have become Medops’ bread and butter. It currently has contracts in Libya, Tunisia and South Sudan, while previous missions supported aid agencies in Mauritania and the Philippines.
“I think our most challenging operation is South Sudan,” Ettir said. “We go to unpaved strips in the middle of the jungle.”
More routine charters are also operated, such as holiday flights to the Pelagie Islands – located midway between Malta and Tunisia – and contracts with Italian football teams. But these represent only a “very small” part of the business.
On the maintenance side, Medavia Technics has rapidly scaled up its activities in recent years and now generates almost as much revenue as Medops’ charters.
The subsidiary specialises in technical work on Bombardier Dash-8 and ATR 42/72 turboprops, while also being licensed for the BAe 146, Beechcraft 1900 and 200, CASA C-212, De Havilland DHC-6 and Dornier 328. Alongside its EASA accreditations, Medavia Technics is recognised as an approved repair station by America’s Federal Aviation Administration (FAA).
It also has approvals from the relevant authorities in Libya, Aruba, Bermuda, Ghana, Guernsey and Kenya – essential documentation for servicing its foreign customers.
All base maintenance work is carried out in the Maltese hangar, while four overseas line stations are maintained in Mitiga, Tunis (Tunisia), Juba (South Sudan) and Accra (Ghana).
“The line stations have very small teams,” Ettir confirmed. “But in Mitiga we have a large number, because in Mitiga we are offering not only maintenance – we are also offering ground-handling services to third parties.”
With four decades of industry experience, the company is opportunistic when it comes to offering related air transport services. It works with external partners to source specialist aircraft, for example, including VVIP jets, cargo types and air ambulances. It also provides flight support services, such as computerised flight planning and help with short-notice overflight and landing permits.
Ettir credited Malta’s geographical location and skilled workforce for enabling Medavia to spread its wings across the sector.
But, he noted, demographic and economic conditions in the country are not always favourable.
Malta’s small population – just 460,000 – means that attracting foreign investment and migrant labour has been a priority for successive governments. Yet the pace of growth is causing some to worry about long-term sustainability.
“Our biggest challenge at the moment is manpower. It’s not very easy for us to attract even third-country nationals to work here,” Ettir complained. “Malta is becoming expensive. Rents are increasing; it’s really dangerous to the whole industry. The competition to attract people is increasing and this puts up wages, which has a negative effect on the competitiveness of the country.”
Medavia Technics would hire 30 new employees this year if it could find the right staff at the right price, he added, but the target is unlikely to be achieved.
Instead, it is now scaling back the types of aircraft it services in order to focus on the most profitable contracts. The Beechcraft 200, the CASA C-212 and the De Havilland DHC-6 will be the first casualties.
Ettir, a former chief executive of Afriqiyah, is also turning his gaze back to Libya with a brand new scheduled airline venture.
The subsidiary, called Medlib, for Medavia Libya, is in the process of obtaining a Libyan AOC and aims to launch domestic flights next year with three leased Q400s or ATR 72s.
“The overall idea is to offer more frequent, reliable services between the Libyan cities,” he said of the planned operation, which will be based at Mitiga. “The services that are being offered at the moment are not really good and the Libyan travellers deserve much better.”
Medlib’s route network is still under review, but Ettir wants it to include “all the main cities” in Libya, including Benghazi, Sebha, Misrata, Jufra, Zintan, Labraq, Kufra, Ghat and Tobruk. Regional expansion could follow if the domestic network is successful, with Malta, Djerba (Tunisia), and Alexandria and Luxor (Egypt) identified as possible targets.
Although Medlib, itself, will not be allowed to fly from Malta to Mitiga – due to the EU’s blacklisting of Libyan carriers – Medops’ existing service could be folded into the new network.
“Both fleets will complement each other,” Ettir predicted.
Asked about the EU ban, he said the Libyan authorities made a miscalculation in 2012 when they voluntarily withdrew from European airspace. Billed as a temporary measure, the ban became permanent when Libya’s Civil Aviation Authority (CAA) failed to address Brussels’ concerns about poor regulatory oversight.
“We were told the Libyan CAA is lacking some resources, but the Libyan carriers – especially Afriqiyah and Libyan Airlines – were doing well,” Ettir insisted. “They were doing much more than the CAA was requesting. They were both International Air Transport Association (IATA) operational safety audit (IOSA) certified, so there is no danger with them flying to Europe. I think it was unfair to employ sanctions on these two Libyan carriers.”
Although Medavia is exempt from the ban due to its Maltese heritage, Ettir has no doubt that restoring connectivity with Europe would bring huge benefits to the Libyan people.
For now, however, he sees little evidence of the necessary steps being taken.
“The governments can do much more than what they are doing at the moment,” he said. “The CAA are not putting any effort into solving this problem. They’re just living with the sanctions now. They are living with whatever comes, day-by-day.”
 

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