The Malta Independent 19 April 2019, Friday

Cost-cutting measures and revenue-generating projects always on the agenda – Air Malta

Rachel Attard and Neil Camilleri Wednesday, 3 April 2019, 08:24 Last update: about 16 days ago

Cost-cutting initiatives and revenue-generating projects are always on the agenda, a spokesperson for the national airline has told The Malta Independent.

Last month, Air Malta announced that it had closed the financial year ending March 2019 with a profit of €1.2 million, registering its first profit in 18 years.

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The airline had closed the previous financial year with a deficit of €10.8 million.

The results were announced during Air Malta’s annual general meeting.

When non-recurring items are taken into account, including the payment of the early retirement schemes and the gain on the disposal of landing rights, the airline registered a profit of €15.7 million, compared to the €13.1 million loss at end March 2017, it was explained.

Air Malta has been in restructuring since 2008, and the company has reduced its workforce through a number of retirement schemes while streamlining its operations, including through the signing of some five collective agreements with its various sections. Tourism minister Konrad Mizzi has on several occasions thanked the airline’s employees for being “understanding” and “flexible.”

Air Malta now plans to increase its aircraft fleet, with the government vision being to turn Air Malta into the “airline of the Mediterranean.” The airline has, however, had its fair share of failed strategies, including the ill-fated partnership with Alitalia.

After the AGM, this newspaper sent a number of questions to Air Malta, asking for the results of each and every route, whether the airline would resort to any more cost-cutting measures when it comes to working conditions, and what the airline’s long-term profitability is without the injection of €60 million.

 Last year, Medair, a company that was set up to administer Air Malta’s landing rights and slots in particular airports, reportedly paid over €60 million to the national airline, helping the airline balance its books.

But in comments to this newspaper, an Air Malta spokesman said: “We would like to make it clear that the airline didn’t receive a cash injection of €60 million.”

“Revenue generating projects and cost cuttings initiatives are always on the agenda,” the spokesman continued.

Air Malta refused to provide individual results for the different routes, saying that this information is of “commercially sensitive nature.”

“With regards to sustainability, we believe that results are sustainable if we keep maintaining growth, increasing revenue and routes for the airline whilst improving the service offered. We believe that this is only possible if there is collaborative effort from all parties,” the airline said.

The airline said that, over the last year it has embarked on a plan to grow its number of passengers, routes and aircraft. This plan has seen Air Malta increase its passengers to 2.2 million passengers, add 21 new routes and increase its number of aircraft to 10.

“As explained during the conference, Air Malta registered an operating profit of Eur1.2million. This profit does not include the selling of landing rights but came from an increased revenue of €5.3 million, better aircraft utilisation, the implementation of a new sales strategy, the investments in IT technology, the signing of all four collective agreements with unions aimed to give a strong base for increased productivity, flexibility and industrial peace stability, and the negotiation of more favourable terms with the airline’s suppliers.”

Referring to the five collective agreements signed last year, the airline said that these agreements are intended to increase employee productivity and maintain industrial relations stability. 

The airline also embarked on a new customer experience transformation project which will focus on an improved service for our passengers, the spokesperson said.

 

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