Thirty-five years ago, on 29 March 1973, Air Malta was registered as a limited liability company. Starting from humble beginnings with 53,500 passengers transported in the first year of operation, Air Malta now carries 2.1 million passengers every year and has, since its first flight operated on 1 April 1974, transported 35 million passengers to and from Malta. The Maltese airline was and still remains the major driving force behind the development of the thriving local tourism industry we know nowadays.

Air Malta was set up with the primary aim to establish, maintain, develop and operate air transport services to and from Malta which, by the carriage of passengers, freight and mail, serve the national interest. Today, 35 year later, the airline still fulfils these aims and has grown to become one of the most important Maltese organisations not only assisting the tourism sector but also providing businesses that operate in this country with a wide distribution network abroad. Studies have shown that the airline today generates around 25 per cent of the total expenditure by tourists and accounts for around seven per cent of the Gross National Product.

Air Malta has brought to Malta 63 per cent (35 million) of the 55 million passengers that have travelled to/from Malta by air since 1973. There is a strong positive correlation throughout all these years between the amount of traffic brought over by Air Malta and the overall traffic to Malta. Air Malta was instrumental in opening up and connecting Malta to the rest of the world and vice versa, in the process diversifying and opening up new tourism markets.

Air Malta started flying operations with two wet-leased Boeing 720Bs from Pakistan International Airlines (PIA) operating its first flights to London and Rome.

The first routes operated by the airline were London, Birmingham, Manchester, Rome, Frankfurt, Paris and Tripoli. Air Malta now serves around 50 destinations with around 200 weekly flights to Europe, North Africa and the Eastern Mediterranean.

Air Malta’s fleet of aircraft now consists of Airbus A320s and Airbus A319s. Incidentally last month after 34 years operating various types of Boeing aircraft, the last Boeing 737-300 with registration 9H-ADI has left the airline’s fleet.

The first major milestone in aircraft acquisition for Air Malta was reached on 30 March 1982. After several months of intensive evaluation of various aircraft types from different manufacturers, Air Malta signed an agreement with Boeing Commercial Airplane Group for the purchase of three B737-200 Advanced aircraft. Their delivery in March 1983 coincided with the airline’s 10th anniversary celebrations.

Air Malta is a firm believer in the importance of the fullest possible utilisation of aircraft. Within six months after taking delivery of its first three Boeing 737 aircraft, the Maltese flag-carrier established a world record with the highest utilisation for all operators of the aircraft type: 14.9 hours per aircraft per day in September 1983. Throughout the years the Boeing fleet has been pivotal in Air Malta’s success story.

Early in 1987, Air Malta signed two other agreements: one for delivery of the first Airbus A320-200 airliner, delivered in August 1990. In March 1989 the airline exercised its option for a second A320-200, delivered in March 1992. In its very first year of Airbus 320 service Air Malta also achieved some of the highest utilisation figures of the type worldwide.

In line with the development of the manufacturing activities in Malta, the transportation of cargo has throughout the years increased its importance for Air Malta. Early in 1993 the airline took a fresh look at its cargo operation with a view for airfreight to achieve a greater percentage of the Air Malta’s turnover.

For its revamped cargo operations, the airline acquired the old Luqa air passenger terminal, which had become vacant following the move of all passenger-related handling activities to the new Malta International Airport terminal. The building underwent a complete internal refurbishing so that it could meet modern air-cargo requirements. The Air Malta CargoSystems and Transhipment Centre was officially inaugurated on 19 January 1994.

Today CargoSystems is a specialised unit providing services ranging from third-party handling through warehousing, cold storage facilities, marketing, on-board courier services and a dedicated scheduled freighter operation: a new concept for the airline which is now in its 14th year running. Air Malta’s cargo services provide also a vital link to the transportation of mail to/from the islands.

Malta’s cargo transportation presents a vital link for the distribution of Maltese manufactured products in various industries ranging from pharmaceuticals, tuna farming, microelectronics and others. These links are further strengthened by Air Malta’s interline partners stretching east to west and cover most of the world.

In July 2002, Air Malta announced that after months of intensive negotiations and evaluations the airline concluded a multi-million dollar agreement which involved International Lease Finance Corporation, Airbus Industrie and CFM International for the renewal of its fleet over a four-and-a-half-year period. Two major elements of the deal involved the sale and lease back from ILFC, a major American aircraft lessor, of Air Malta’s own two A320-200s and three B737-300s, and the lease of twelve new aircraft from the Airbus A320 family for a term of twelve years each.

At the start of the millennium, the airline recognised the need of a younger fleet to lower maintenance costs and downtimes. The post 11 September 2001 aviation crisis provided the negotiating team a unique opportunity to obtain huge concessions.

The delivery of new state-of-the-art Airbus aircraft have presented Air Malta with substantial operational and technological advantages including better cabin layouts, in-flight entertainment opportunities and cost savings arising from fleet commonality. Substantial savings were registered in crew certification and recurrent training, reduced aircraft and engine spares inventories and better economies of scale in the production departments. The new fleet registered superior performance achieving a better fuel burn ratio presenting the airline with a more environmentally responsible aircraft fleet with less CO2 emissions and noise footprints.

Since Malta joined the European Union in May 2004, new opportunities arose for Air Malta. The airline immediately took the initiative and on 1 May 2004 started operating intra-European flights between Catania and London’s Gatwick airport. The airline’s intra European network has now been expanded with flights from Catania to Munich, Casablanca, Geneva and from Reggio Calabria to Rome among others.

Air Malta also capitalised on these new opportunities by setting up bases in the UK and started to operate charter flights from the UK to a number of holiday destinations in Europe.

Over the last years Air Malta, like the rest of the global airline industry, has been facing difficulties as a result of erosion in average revenues and escalation of operating costs. These factors, coupled with increasingly fierce competition and dynamic changes in the aviation industry, have led Air Malta to restructure with a view to achieving long term sustainability.

In May 2004, Air Malta reached a wide-ranging “Rescue Plan” Agreement with the four Unions representing the airline’s employees. The milestone agreement showed the mutual intention and willingness of all the Parties to cooperate in order to solve the difficult financial position of the company and to provide the basis to ensure that the airline can continue to play a major role in the Maltese economy. The three-year agreement paved the way for a restructuring exercise without the airline engaging itself in forced redundancies. Air Malta and the unions also agreed to a far reaching cost-cutting exercise, the setting up of a Works Council, a moratorium on wages for the duration of the agreement and changes in restrictive work practices amongst other things.

Soon after the signing of this agreement, Air Malta started implementing its restructuring plan both in terms of its organisation and its operations. The plan which has now become an ongoing process of change is aimed to streamline the airline’s activities to reflect today’s realities.

The airline has also started divesting itself from non-core operations, namely the hotel operations, the tourism handling company and its airport retail operation. It also embarked on an outsourcing programme and sought to change work practices to achieve significant cost reductions.

The airline is also actively implementing changes to its Information Communication Technologies (ICT) systems aimed at providing better services to its customers while cutting down on its administration and distribution costs. Several projects have been implemented including e-ticketing, a new portal and on-line booking engine and revenue management systems. Other ICT projects are currently in the process of being implemented and include web and mobile phone check-in. In the meantime Air Malta has sought to enhance the customer experience on board with the introduction of an in-flight entertainment programme.

Air Malta continues to be the prime air transport enterprise and throughout the years has invested in markets which have the potential to augment Malta’s tourism intake. The airline remains the main operator offering the most extensive choice of air services to get to Malta. Air Malta was, is, and will remain committed to the Maltese community and its economy.

Article submitted by Air Malta