The Malta Independent 17 May 2022, Tuesday

The bird made of lead

Noel Grima Sunday, 23 January 2022, 08:33 Last update: about 5 months ago

In the 1970s, when Dom Mintoff was setting up Air Malta, some Nationalists came up with a doggerell children used to sing “Ghasfur tac-comb itir”

This caused, as I remember, a huge scandal. These Nationalists, whose hatred of Mintoff knew no bounds, were wishing the planes to crash, the Socialist supporters declared.

The planes thankfully did not crash. But now after all those years it is the airline that’s crashing down.

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Government after government from both sides have thrown in good money after bad but the patient has remained sick. Now it is on life support.

And yet the two parties do not seem to have understood the downfall was inevitable. As I see it, this is the inevitable conclusion of Mintoff’s central thesis – that he could set up a public venture that would be run on private sector lines and compete in the market.

He failed in the dockyard, in the shipping sector, in the foundry. He would have failed in other ventures had there been a level playing field. He turned Malta into one big election constituency.

When he was setting up Air Malta, there was already a fledgling private sector airline, at least in embryo, Air Melita. But Mintoff threw the millions the State could gather plus State-to-State agreements with Pakistan after it was divested of Bangladesh, and Air Malta took off with some of PIA’s excess planes.

This was Mintoff’s general scheme – he nationalised everything – banks, electricity, shipping, dockyard, fuel, etc - and set up national corporations some of which are still with us today. But time and again these huge ventures have drained our national resources and became the huge clout of labour-intensive (obviously vote farming) corporations.

The leftist intelligentsia (not necessarily Mintoffian, like Alfred Sant) embraced this nationalised scheme wholeheartedly. The Nationalists, when they came to power, were too awed to do anything except tinker.

Let’s focus on Air Malta. The Mintoff government gave it its best brains – the formidable Bertie Mizzi followed by Louis Grech. Air Malta took to the skies and every Maltese heart skipped a beat when the plane with the national colours landed at Heathrow, or Rome, or Munich.

The airline turned a profit, time and again, but that was when the airline had an almost monopoly on travel to Malta. When new low-cost airlines came in, despite Austin Gatt pledging to resist them “over my dead body”, Air Malta lost its market share and the profits became losses.

Before that, the airline had collected its own huge mistakes – the new breed of smaller planes that soon showed up glaring gaps in strategic planning. The airline was forced to sell them off at a discount. But that model is still operational in other airlines, as anyone can see.

Then the airline faced union trouble. I remember when chairman Joe Tabone ordered the airline shut down but was soon overruled by Eddie Fenech Adami. The union trouble continues till this very day.

Both administrations made their mistakes, which is more than understandable when you consider it is really none of their business.

Perhaps however none has accumulated as many mistakes as this Muscat-Abela duo. I remember interviewing a top official soon after the airline relocated its office from the inconvenient former British services building to Skyparks. The big rooms were empty and steps resonated in that emptiness. “This is how we have ended up,” he told me, “a virtual airline”.

That was his take on the Austin Gatt reform which he was commissioned to implement. Instead the airline soon reverted to getting people in and becoming a favourite resort to park constituents at election time.

Minister succeeded minister, often at cross-purposes with each other, trying to be purchased by Alitalia, itself on life support (Edward Zammit Lewis) or expanding and planning routes to India and New York (Konrad Mizzi). The accounts have not been published for years but we are now being told there was never a profit made except when the airline sold off its exclusive slots.

Agreements to hive off workers were not implemented and the airline has now been refused permission to get more help from the government.

So at the end of this sorry saga I am still asking: would a private venture have done better? There are private ventures doing well for themselves – in transport (Virtu Ferries), in beers and soft drinks (Farsons), in IT, etc. They do not have to be in real estate only.

But since they are not in the public sector they do not have to employ people just to boost a minister’s election chances. They register their accounts in all transparency and they have clear and well-defined business plans.

Having said all this I still hope this government’s plan to turn Air Malta into a low-cost airline is successful. But somehow I still think it won’t make it. And I still think running an airline is no business of government.

 

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