Our national airline, Air Malta, carries more than its fair share of cargo and passengers on board.  Inside its belly you will find not only crates and packages, but also politics, local economy, folklore and a social metaphor – a microcosm and cross section of the island.

From its inception and up to the present day, Air Malta navigated not just the skies but also the political spectrum whether in industrial relations, nepotism, management style, business model, bailout and a multitude of other decisions, serving from one administration to another.  At present, in its position of one step forward, one step backwards there is still much uncertainty surrounding its future.

We all were rather sorry to read of the fate of Cyprus Airways and whether our own airline could suffer the same destiny – yes, of course it could – but would it?  So much of the Maltese soul is embedded in the airline that a failure there could have quite an impact on the psyche of the population.  Some may simply shrug it off and accept the rules of competition and business on the success or failure of any company; others will feel they have now well and truly lost the last bit of identity that the island had to offer besides il-malti, pastizzi and festi.  And tourism will surely have to adapt accordingly.

Cyprus Airways must also have been adversely affected by the situation in Russia and the drop in tourism coming from there.  As geopolitical events affect any airline, the situation at Air Malta cannot be left to chance and conjecture.  The board and management are struggling to breathe and reach dry land.  Several life rings have been thrown but floating at sea does not mean certain rescue.  Any decision now must be based on marketing value and future growth prospects of the airline under its current strategy. Is the company clear what that is?

A look at a similar island legacy airline – Air New Zealand - which also required bailout to avoid financial collapse and which also was important for a geographically isolated nation so dependent on good transportation and the contribution tourism made to the economy, can be insightful. 

During the late 1980s and 1990s Air New Zealand was a champion of inbound tourism development and growth for New Zealand (population of around 4.4. million in 2013).  Since the late 1990s international capacity has stagnated as the airline focuses on load factors and yields in a margin strategy, not a growth strategy.  Air NZ’s international capacity has increased a tiny 2.5% in 16 years.  In contrast, inbound tourism has grown 82.8% and NZ resident short term departures have increased 51.7% over the same period 1996 to 2012. 

As the statistics show Air NZ’s relevance in the market has eroded significantly.  The combined inbound and outbound markets have grown a total of 67.4% yet Air NZ has offered up only 2.5% capacity growth.  The airline has passenger growth greater than the 2.5% capacity growth with an increased load factor, up from a low 68.4% in 1996 to a high 83.1% in 2012. 

Airline capacity for New Zealand tourism growth has come from the collection of all the other airlines servicing the New Zealand market* – much like Malta.  Similarly to Air New Zealand, Air Malta needs to focus on its fundamental business as an airline and provide for structural growth and competitiveness.  *airline consultants.com

Short sighted cost cutting of markets and quality is not attracting business and will cause a further slide in trade and most importantly, in reputation.  Has Air Malta respected the reasons why it was rescued and has it continued to provide the vital transportation linkages and develop those important markets for inbound tourism growth?  

When opening up new routes, can the development of that new route be done better and smarter?  In the way that, say, a bank will open in a new destination?  Each new destination has its own standard of living, competitors, special interests and preferences. 

I believe that most passengers prefer to use an airline that speaks their own language, so positioning the airline to attract foreign customers means understanding their culture and potential and making them feel secure and respected.  It is quite likely that when travelling with Air Malta, customers would actually have an alternative cheaper destination to go to but they have chosen to come to Malta.  So, Malta as a tourism destination is essential to Air Malta. 

We also have to sell Malta wherever we are selling Air Malta.  Indeed, if not going hand in hand, promotion of our island in a new market should actually precede the national airline launching there. 

As an example, one might suggest Sao Paolo in Brazil, or Minsk in Belarus.  There is an interest by the industry in those markets to sell Malta and business has been modest and could be worth investing in.  Both are very different markets with very different needs.  Very little is known about Malta in their country but their outbound tourism is such that Malta could benefit from a presence there. 

Belarus is presently enjoying good income from the effect of the sanctions on Russia as it steps in to provide goods and services to its Russian neighbours.  Brazilian tourists are long haul tourists and include several countries on one holiday.  They also have long stay travelers who do not need visas and come to study English and work in Europe.  One important fact about Brazilian tourists is that they always need extra luggage allowance.  20 kg just is not enough as besides needing luggage for a long holiday, they are also big shoppers.  Belarus, on the other hand, has good charter holidays to Spain and Greece in the Med.  There may be some problem with getting to fly to Minsk because of protection for Belavia but there are also neighbouring airports used by Belarussians.  Both Brazilians and Belarussians love culture.

The government has said that it will allow the restructuring plan to go ahead but the situation, starting from the removal of Peter Davis as CEO of Air Malta and further tinkering has caused fractures in that plan which may need to be examined.  

Do recent changes to the product, such as the famous water and bread on flight meals really bring the benefit of savings or will it actually demote the airline to just another low cost airline with regular prices?  Being a niche market airline, any passenger would have expected the opposite to happen – that extra benefit of a meal and flexibility. 

I’m sure that the baguette or bezzun as it actually is, will not suit the elderly and children at all.  Why not try to find advertisers for the meal?  Maybe an advert on the cover of each lunch box would help lower costs. 

Let’s face it anyway, we do not know how to make a good baguette or sandwich other than a local ‘hobza’ or a good fry-up.

Lucky for now the cost of fuel has continued to decrease but we do not know if Air Malta sees the benefit of this.  Surely this opportunity must not be missed as with this cost reduction alone it can already manage to cancel much of the debt.  But that is not enough, as the price of fuel may surely rise again and difficulties will be faced again unless the necessary growth plan is put in place. 

Possibly we have come full circle with the appointment of the new Chief Financial Officer who will come from overseas.  Surely all this loss of time in trying to restructure the restructuring could have been avoided with some political maturity. 

Nevertheless, it would be better to ensure the future of Air Malta now and give it the unbiased attention and bi-partisan support it needs before it becomes the scapegoat of political interference and market pressure insufficiently managed. 

This is needed not just to sustain the airline for its own sake, but to maintain a good value and investment, jobs and to keep our cargo transportation and links for tourism and business as effective as possible for the good of all in this country.