Air Malta is currently experiencing a power vacuum, with no fewer than six top management positions vacant during what is a critical point in the airline’s restructuring plan, company insiders have told The Malta Independent on Sunday.

The company’s CEO, Louis Giordimaina, resigned last month. When he joined Air Malta in November, he was immediately faced with an exodus of management staff forming part of the team of the previous CEO Peter Davies.

Insiders said that Mr Giordimaina may not have had the necessary support to get his own team on board to continue with the restructuring plan. Air Malta is currently without a Chief Financial Officer, Chief Commercial Officer, Head of Human Resources, Head of Marketing and Chief of Flight Operations.

Contacted by this newsroom, a spokesman for the Tourism Ministry, which holds the national airline under its remit, commented: “The Air Malta Board is currently working hard to fill all management posts in the coming months.

“The company is currently undergoing a process of external audit and the full financial scenario will be presented during the AGM in October. At the AGM, the company will also present a number of short and long-term solutions that will ensure the company returns to commercial viability as soon as possible.”

Our sources also pointed out that the recurring shock brought about by general elections has made it impossible to run a commercially viable company, as the entire board is obliged to resign every five years.

The airline had been given a loan of €52 million in 2010 as well as €130 million in state aid which was approved by the EU, on the condition that Air Malta was completely restructured. To date, over 500 workers have been shed from the airline.

Such a complicated restructuring plan requires a cohesive team, something which is sorely lacking at the moment, sources said.

Air Malta staff are feeling the same insecurity that they felt prior to the arrival of Mr Davies’ team in 2011, which is being further compounded by a lack of communication and rumours about a forecasted loss of €30 million for the financial year ending in March 2015.

Many observers are surprised by Air Malta’s woes, given the record number of tourist arrivals over the past few years, but the airline has come under pressure from increased competition which was not forecast in the restructuring plan. The airline’s fares have been facing downward pressure yet costs have remained the same, resulting in less revenue.

But along with record tourist numbers came record competition for Air Malta. As the Ministry spokesman explained: “It is a known fact that this is a challenging year for Airmalta. Malta currently has 31 airlines flying in and out of its airport compared to 24 it had three years ago.  

“This increase in competition and seat supply, as beneficial as it is to the tourism industry and locals who want to travel abroad, has driven Air Malta’s prices down and affected the company’s bottom line. Moreover, the Libya crisis and the closing of Tripoli airport has cost the company millions in lost revenues, as this route was one of its most profitable.”

The focus on increasing tourism numbers has seen successive governments provide marketing assistance and subsidies to low cost airlines, much to the detriment of the government’s own airline.

The loss of the two Libyan routes to Benghazi and Tripoli has also had an impact on Air Malta’s finances, as even with a low passenger load factor the routes were profitable.

The recent launch of two weekly flights to Djerba in Tripoli near the Libyan border has somewhat mitigated the losses, and another flight will soon be launched.

One further worry for Air Malta is that the lease agreements on its current fleet of aircrafts will expire within the next two years. Renewing the lease or bringing in new planes will costs Air Malta millions, yet the government is not permitted to give the company a single penny.

This means that private investment is the only measure that can save Air Malta, as otherwise it will soon end up without any planes to fly with.

But according to the Ministry, the issue is a non-factor: “There is no issue whatsoever with regards to the funding of the renewal of the fleet once the current agreement expires next year,” the spokesman confirmed with this newsroom.