The Malta Independent 2 May 2025, Friday
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Amitex 2017: Air Malta changing to a hybrid business model

Thursday, 6 April 2017, 09:53 Last update: about 9 years ago

Joseph Galea, acting CEO Air Malta

In 2016 we carried 1.74 million passengers, an impressive increase of 12% over the previous year, despite the reduction in fleet.

It has not been an easy year as cutthroat competition on the Malta route has continued relentlessly. This year we feel that considering Malta's economic climate and strong tourism performance we will achieve a higher number of passengers. This augurs well for our tourism performance this year.

Last weekend we started operating our summer schedule. We are operating 150 weekly flights to 30 destinations. With this schedule, in just seven months we are planning to carry 1.2 million passengers with a fleet of eight aircraft similar to last year.

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After a period of consolidation, we announced last week one definite new destination, and we are close to deciding a second new destination.

After having operated in the past as a charter destination, as from 20 April we will start operating to Tel Aviv as a scheduled service, making it possible to buy seats through www.airmalta.com and also travel agents.

This summer we have focused on our core routes; increasing frequencies on them while decreasing or stopping operations to low performing ones. We have increased frequencies to the most convenient international airports enabling our guests to fly when they want with the least ground transportation costs possible.

Our strategy to increase frequencies will translate into better opportunities for short-break visitors, growth in tourism numbers to Malta, while operating with increasing aircraft utilisation.

Next summer we will continue being the largest charter operator to/from Malta and we are planning an interesting programme for Maltese and foreign operators.

Air Malta will continue with code-share agreements with major airlines that expand our network to markets worldwide. These include Air France, Alitalia, Emirates, Etihad, KLM, Lufthansa and Brussels Airlines, among others. We have over 60 agreements including interline arrangements with reputable airlines which continue to show the mark of confidence in the Air Malta brand.

We are determined to continue maximising our limited resources to achieve better operational efficiency and reap the best opportunities from our route network. The connectivity we offer as a legacy carrier provides the Maltese islands with a gateway to all the world. Air Malta has always been at the forefront to connect the Maltese Islands to the rest of the world and we are working hard to continue to be the flag bearer of our small nation.

However, there is still a lot to do at Air Malta. It is a never-ending road of change. Competition, new technology and the ever-changing travel business drive us to constantly challenge the status quo. Low-cost carriers have revolutionised the short-haul market, expanding the choice of air transport to consumers at the lowest cost. As the industry dynamics have changed, so have the LCCs business strategies.

To compete with new LCC models many traditional full-service carriers like Air Malta have created new products, restructured and streamlined their processes, slashed costs and aggressively priced many routes. This has in turn also forced LCCs to change or enhance their business models as well.

With LCC carriers veering from the fundamental low-cost strategy and traditional airlines using more and more LCC tactics we see the emergence of the "hybrid" business model. This model combines the cost-saving methodologies of a pure low-cost airline with the service, and route structure of a full-service carrier. The best of both worlds is creating a new strong basis for many airlines around the world, putting the needs of the customer central.

We aim to be a hybrid carrier offering the best value for money and the product a passenger expects yet fulfilling the needs of people wanting a full business class service or traditional economy class service.

Now it is up to us to continue this change process and bring the airline into a business model that better fits this changing market, so keep tuned as more news will follow. The product must become modular. Offering the customer the choice to construct the product he/she is willing to pay for, and for those who like the traditional economy class or business class product Air Malta will be one of the few airlines offering this choice too.

All other services are offered at a fee through a retail platform accessible for all passengers regardless of the channel they booked. Catering, baggage options, fast track, seat selection and other ancillaries can change to transform the whole customer journey and let the customer choose what he or she wants.

We will continue to make changes to our distribution and work together with industry giants to manage costs. We need to have better control over the passenger journey and get closer to the customer, however, we will continue to work with other traditional channels if the revenue generated justifies costs. No one channel is small enough to be ignored.

Revenue creation should be the first concern. We are continuing to refine our network with more flights to some of the best leisure and business destinations. We are continuing with our strategy and concentrating on the most convenient international airports that offer worldwide connections to and from Malta. We are determined to further grow in our key markets and work to open new traffic streams to new leisure markets in the medium-term.

We have embarked on the digital transformation of Air Malta which will allow better and more streamlined communication and customer journey. Knowing the client, and using this knowledge to look for new clients and make offers at the right time, the right place and at the right price will be key.

CRM will be our central focal point. It will also help us to work more closely and personally with the travel trade. You have all noticed that our sales promotions have become very important to compete in the cut-throat and fast moving market by offering attractive low fares. These go a long way to reverse the misconception that Air Malta is expensive.

It is imperative that Air Malta continues to receive the support that it needs. This support requires everyone's understanding and cooperation including that of our shareholders, banks, suppliers, unions, employees, tour operators, travel agents and last but not least, the travelling public.

The Maltese islands require a good strong airline, able to stand alone on its two feet and which fulfils the functions of a passenger and cargo carrier. Not only, the country also needs a socially conscious operator that is so vital to an island nation.

Air Malta is "More than just an airline". No airline operating to Malta supports the Maltese community as Air Malta. Over the years we helped various sectors, be it in areas such as tourism, arts and culture, philanthropic, medical, sports and environmental initiatives.

Some neighbouring and larger countries within Europe are missing out on having their own airline. They have lost their own identity in aviation and today they are no longer masters of their own destiny and need to rely on the commercial interests of foreign airlines to provide air connectivity for them. The history of Air Malta is an important one and we are duty bound to continue supporting it and look forward to its future and to many more take-offs and landings.

Speech given at the inauguration of Amitex 2017 
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