Investment, Industry and IT Minister Austin Gatt yesterday launched the 14th Air Malta International Travel Exhibition, which runs till Sunday.
Speaking at the launch, Dr Gatt said the past three years have been trying times for the entire aviation industry and while Air Malta has “not cleared the turbulence completely… it wants to keep flying – our country needs it to – and as the landscape ahead of it changes, it keeps facing a number of tough challenges.”
He referred to the fact that three years ago the government had injected Lm30 million in the capital base of the company, but said the real test was the recurrent account of the company.
Air Malta netted core operating losses of Lm10 million in 2004, but within two years the company had saved Lm12 million, with cuts in all operational areas.
Unfortunately, the surge in fuel prices, amounting to more or less the same amount as the savings, wiped out a significant part of these achievements, so the company had to strengthen its efforts to achieve further cost efficiencies and seek new sources of revenue.
Dr Gatt said Malta’s incoming tourist figures were stable and the macro view showed no tendency towards massive growth or a massive drop.
In this context, Air Malta’s market was not expected to double or halve any time soon either, said Dr Gatt, adding that the underlying scenario for flying in and out of Malta was one of stability and therefore of a continued, though gradually diminishing, tendency for seasonality.
This winter, Air Malta lost 12 per cent of the market share on its scheduled London route as a result of competition.
Dr Gatt said there was no doubt that low-cost carriers offered greater competition. “On the one extreme we know for a fact that the low-cost model is a successful business model, but does a low-cost Air Malta satisfy the needs of Malta? The answer is patently a resounding no!
“Three years ago I said ‘change or die’. We changed. We did not die. Air Malta need not die now, because its people – its managers, its employees, its owner – have proved that they can embrace change. As long as we all continue to embrace the internal change process dictated by the market forces surrounding us, Air Malta will continue to fly,” he said.
Air Malta chairman Lawrence Zammit argued that Air Malta’s route network was one of Malta’s key assets because “it drives connectivity for Malta’s economy and nibbling at that route network will be to the detriment of Malta’s economy”.
Mr Zammit said that if capacity was important to tourism, connectivity was the driver of the whole economy. Air Malta, as a full service carrier, delivered both, without sacrificing one for the other.
“Air Malta does not choose its passengers. Rather, a wide diversity of passengers elect to fly Air Malta for what it is – a full service airline that cares for and meets their needs,” he said.
By using its own internal resources, Air Malta’s restructuring process has made more headway by far than was publicly understood and appreciated.
Quoting data published by the National Statistics Office, Mr Zammit said the number of Maltese flying overseas in 2006 had increased by 12 per cent, and Air Malta held 78 per cent of the market.
He maintained that Air Malta’s popularity with the Maltese continued to improve, as had been evidenced by the airline’s increased share of the market.
Amitex 2007 is taking place at the Trade Fair Grounds in Naxxar and is open from 6pm to 10pm today and tomorrow. On Sunday, the opening hours are from 10am to 1pm and from 4pm to 9pm.