Air Malta has announced that it has managed to halve its losses for the financial year ending March, and this thanks to an enhanced management structure, a studied cost-cutting exercise, improved efficiency and a better utilisation of resources.

The airline’s operating loss dropped from Lm6.2 million in 2006 to Lm3.1 million in 2007, and this also despite a Lm12.8 million increase in fuel costs. During the 12 months under review, the national airline carried two million passengers while increasing the number of seats available by nearly 100,000.

While these financial results can be described as encouraging, at the same time it must also be said that the company is still far from achieving its target – that of becoming profitable once again. Investments, Industry and IT Minister Austin Gatt was very clear in his thoughts when he spoke during Monday’s press conference – “The company cannot afford to continue to make a loss,” he said.

It is not an easy time for Air Malta. The rise in the international price of oil has led to increased fuel costs over the past years and, at the same time, the company has had to face stiff competition not only from the airlines that have been coming over for decades, but from low-cost airlines which have started their operations to and from Malta in recent months.

Air Malta replied to this “threat” – it registered a 24 per cent drop in revenue from the UK market, just to give an example – by widening its horizons, in the sense that new routes have been introduced while others were beefed up with more flights. The airline will have to continue looking for other avenues to enable it to meet the tough challenges it is facing.

Malta’s European Union membership has helped the airline find other ways to increase its revenue. Air Malta has already taken the cue and is operating flights between countries without having to return to base, and we are in no doubt that the company is studying the market to find other routes it could run.

What must be kept in mind is that the reform that was carried out within the company three years ago has helped in no small way to control the airline’s losses. The restructuring exercise that has been in force since has, to quote the minister, returned “the expected results”.

And this is where the airline’s next problem lies. The agreement reached with the four unions that represent airline employees in 2004 is about to expire, and a new one is being negotiated. Unlike what happened three years ago, the four unions have decided to go their own way and discuss their own separate agreement with the company, which means that it will perhaps be more difficult for an accord to be reached.

When it had been announced that the so-called business pact with all unions had to be shelved because two unions – the ones representing the pilots and the cabin crew – chose not to go for one comprehensive agreement, The Malta Independent had called for all those concerned – the workers, the management and the government – to pull the same rope in search of an agreement that pleases one and all, and in the shortest time possible.

What this newspaper had written editorially on 19 February still stands – “the employees have made sacrifices and perhaps, the company will want them to make more. They must however be assured that their jobs and their conditions of work are a high priority for the airline. The company must also ensure that it recognises the sacrifices being made by the employees and that it appreciates them. In this spirit, one is sure that responsible unions would make every effort to ensure that the airline can go on and can return to profitability.”

It is now up to all the parties involved in the issue to make this come true.