Last Sunday’s edition of our paper and other national media carried reports about the rather critical discussions between Air Malta’s management and staff. While one cannot comment on the internal questions raised, some fields also lend themselves to comment from an external perspective. Starting off with the question of the larger A321 aircraft, we will also look at real estate, cargo, fuel in Libya as well as African route potential.

The A321 question

A suggestion put forward has been that of making use of larger Airbus A321s. Such planes would have to be acquired, for example through leases since they currently do not feature in the Air Malta fleet.

Since the EU is limiting the number of aircraft Air Malta operates, this would mean replacing a smaller aircraft (possibly a 141-seat A319) with an up-to-220-seater without infringing on the “number of aircraft” clause. This would mean more ‘capacity’, a buzzword for tourism growth although the issue is more complex since it is also the diversity of routes and frequencies and network hub connections that generate sustainable growth.

An advantage of the A321, which in my personal opinion one of the best jets on the market, is that it not only has vast commonality with the current fleet (since it is a stretch of the A320 basic plane, while the A319 is a shrink) but the fact that it is a stretch also means that it has a far higher efficiency when it comes to fuel burn or flight deck crew cost per seat. For an A319 one has to have the same basic structure which makes the aircraft proportionally heavier when empty, compared to the stretched A321. Basically the fuel burn is 2.6t per hour on an A321 versus 2.5t per hour on an A319, however with a seating capacity difference of a good 70 seats.

The profile of a possible operation of such aircraft could be some routes that one can fill non-stop in summer on certain days (predominantly hubs with code-share feeders as well as operations on very strong point-to-point routes), some very selected tour operator routes, and on the other hand the combining of two weaker markets, where even an A319 cannot be filled properly, into one route, provided geographic proximity makes sense. A321s might also be used as preventive strike measure on certain routes where otherwise competition might be invited from other stakeholders in Malta or by itself. The fact is that for some hub routes even on strong days there is still enough empty seat capacity on the current fleet, so one will have to see how to fill the additional seats then.

With combined (triangle) flights the marketing point comes in. If a combined flight (like e.g. Malta-Manchester-Birmingham-Malta; or Malta-Berlin-Hamburg-Malta) competes head-on with non-stop flights which are additionally competitively priced or even subsidised, then one will have a competitive disadvantage from that point of view. One also should be aware that Air Malta has in the past, and to some extent now, even been operating ‘triangles’ where even an A319 proved too large. And ‘triangles’, even more if occasional, are a clear no-go for flights to network hubs where precise and steady fixed timing is a must. Over the last decade Air Malta has made a lot of progress in that field of a streamlined operation that has been able to generate more traffic through code-shares with Lufthansa group carriers, and one should not jeopardize this. During winter ‘triangles’ could help keeping open routes or frequencies that would otherwise be seasonally suspended.

Generally carriers operating A321s are either large network carriers (like those of the Lufthansa group, where it also replaced the larger but ageing A300 ‘Kontschaufel’, or US Airways) or domestic operators of highly populous countries such as PRC carriers (such as China Southern), or tour operator-focused carriers (like Monarch and Atlas Jet). From the point of leasing out planes in winter, the A321 is a difficult case and no way as easy as the A320, because of the profile of potential carriers operating them (none of them likely to add on seasonal leases, network carriers with quite fixed fleets) or having markets large enough to support them.

The head office and Selmun

Air Malta is moving out of the current head office due to its deal with the government. Hopefully the current Air Malta head office, once vacated, will soon be put to good use. A small island like Malta cannot afford to let publicly-owned buildings of commercial or public administrational potential remain vacant, let alone to deteriorate. Air Malta has rightly now taken the (overdue) step to look at the international market to remarket Selmun Palace hotel given the lack of sustainable local interest.

Cargo etc...

Particularly in view of the horrendous, not exactly export-friendly charges of local parcel mail services compared to abroad even on the Malta route (partly multiple times as much as inbound from the same corresponding country with the same brand), Air Malta must get a fairer share. This was a striking issue right from the beginning of the reform program.

In-flight sales should of course start taking-off when demand is most likely to be there. At least speaking for the German market, Air Malta is definitely not a ‘damaged brand’, and it can rather be counted as an established one – hardly would the Lufthansa group as the leading continental carrier put an array of its own codes on various Air Malta flights. The brand problem is maybe more of an image issue on the Malta side. However, branding can also mean something internal, beyond the logos, so one cannot comment further on that.

Fuel from Libya

It will be very positive when Air Malta can take advantage of low fuel prices in Libya and fill planes to have maximum landing weight when approaching Malta on the return flight. The different fuel prices have also been taken advantage of by other carriers in other countries, for instance Lufthansa has been routing flights to Addis Ababa through Khartoum not only for combination purposes, but because fuel in Sudan is very cheap, just as Air Cargo Germany has been doing on its Africa runs with its jumbo freighters.

Africa routes

The transit potential on the North African field is certainly the routes to Libya; maybe one could also develop a code-share for the Egyptair flight to gain some feeder seats too. For other routes one has to be careful, not just because of the political unrest risks, but rather also from the point of if they make geographical, time and commercial sense for the core markets, which clearly are not east-west in the Mediterranean with a very few exceptions; we also all know of some of the ‘highlights’ of the hubbing idea with the Avros.

The natural position that Malta and Air Malta could exploit is rather the north-south traffic to sub-Saharan African cities. Cities like e.g. Accra/Ghana, Abuja or Lagos in Nigeria, or others in the more central and eastern section of the (sub-)Sahara area, are places where routes to/from the markets in Europe might find Malta an apt stopping point, similar to the case of Iceland where Icelandair could develop this on North Atlantic sectors. Until the unrest in Libya, Afriquijah Airways, with its base in Tripolis, which is geographically comparable to Malta in position, had positioned itself by operating the Europe flights by day and the Africa flights by night. Royal Air Maroc has been looking more at the west, while Egyptair at the east of the continent.

For Air Malta, one could for example dispatch flights out in the late evening when returning on the inbound wave from Europe, that come back in the (early) morning before the usual morning wave starts. This would certainly mean fuel, crew and maintenance cost input, however keep aircraft productive that anyway remain parked with the leasing bills piling up day and night anyway. The distances would be comparable to Scotland, Oslo, or Moscow routes, plus about 500kms, clearly no problem.

The question at the moment is certainly whether Air Malta can risk to go into a financially intensive development to/from markets with basically zero point-2-point traffic on the Africa to Malta side (unlike Libya had), while its balance sheets and legal position in view of the EU are as they are. Air Malta can neither build on a diplomatic/political network of the power Afriqiyah Airways had for its project with Gaddafi’s African Union idea behind it, nor on post-colonial ethnic and economic links like Air France, Brussels Airlines or so, nor is it part of an alliance network that can source globally more than a sole carrier even of the size of Lufthansa could do alone.

While the geographic potential is clearly there, and Africa is proving a properly yielding market for a number of carriers and has also cargo potential, at this moment, Air Malta’s core justification of existence, as set up by its founding fathers, on which it has grown, which certain stakeholders should have acknowledged more in past years, and on which it now can justify as a basis for its governmental support, is that it is first and foremost the lifeline for tourism, general industry and ultimate connectivity of our small island nation. And there is already a lot to do as regards securing that.