WHY AIR MALTA WAS NAMED TURNAROUND AIRLINE OF THE YEAR, 2018

Updated: Feb 11, 2019

Maltese flag carrier Air Malta, is expected to post financial numbers for the period ending March 31 which are to mark the first ever time it has broke even for over 2 decades. This is, undeniably, a big achievement.

Air Malta is, some would say, a tiny airline but has suffered hugely both financially and reputationally. Times are changing and with a small yet strong fleet, its glory days are starting to re-appear.


BREAKING EVEN

After declaring it was on the brink of bankruptcy in 2010, Air Malta has seen intensive restructuring that began with cutting routes and downsizing the airline as a whole, but that didn’t work. It was expected that in five years, the airline would be back on its feet and consequently profitable.


Air Malta was also in search of a strategic partner. Many thought that without one, Air Malta would not be able to survive and would indefinitely go bankrupt.

“Our main goal has become to put the airline on an even keel and on a sustainable path forward, primarily to serve the Maltese Islands. This is why we have expanded the airline's horizons.


Are we seeking a strategic partner? At the moment, I can tell you, no, we are not seeking a strategic partner. We are concentrating on strengthening and growing the airline, rendering it more efficient and investing in IT while adapting more quickly to change,” explained Air Malta Chairman Charles Mangion in an interview with the Independent.

But, as mentioned, that didn’t work. Last year the government realized, something was wrong. Fortunately, they appointed incoming Tourism Minister Konrad Mizzi, who has since tried his best to turn Air Malta back into a profit-making airline.


WHAT AIR MALTA DID NEXT

Konrad Mizzi set about changing Air Malta back into a growth strategy. This new plan saw Air Malta add many routes to its network including St Petersburg and Berlin and also inaugurated new services from Catania and Cagliari building its presence around southern Europe in the hope of becoming the airline of the Mediterranean.


“We identified a number of islands around the Mediterranean, such as Sicily, Sardinia, Corsica and Cyprus (the latter lost its national airline) which are under-served and require better connectivity to their mainland and beyond,” explained Mangion.

The iconic Air Malta free breadroll/bezzun was sadly removed in favour of new standard charging menu’s generating further income for the airline and reducing expenses.

Its fleet size was also increased which saw the addition of its first and only Airbus A320Neo; slow growth but profitable. In fact this growth was well worth it: Air Malta saw passenger numbers increase by a massive 35% between January and August this year!


THE PILOT UNIONS

Air Malta originally stated earlier this year that they signed collective agreements with pilots which have however, evidently not been taken well. Pilot union ALPA has been complaining about the working conditions for some time now. They state that the pilots fly way too many hours and therefore they are not being treated in a fair way. Air Malta denied the claims, publishing data which demonstrates that Air Malta pilots fly well below the maximum number of flight hours. In fact, they fly on average 650 hours per year, well below the 900 industry maximum and the Ryanair 842 hours.


THE PILOT SHORTAGE

However, more problems emerged.


Air Malta is, like many airlines, facing the pilot shortage. This is severely affecting Air Malta, perhaps almost more than any other airline in the world. The Pilot Union ALPA was reportedly responsible for 40% of Air Malta pilots calling in sick in a single day, although the union denies it. This, the carrier says, costed them around EUR500,000 which was a massive expense considering its small financial reserves.


Due to the pilot shortage as well, the airline has been pushing its pilots to fly more than usual. Some of them have even been called in while on holiday. The problem with this, is as part of the contract with ALPA, Air Malta must allow 104 days of holiday per calendar year.


"For the end of this year Air Malta will be unable to meet this contractual obligation. Various meetings held with management to find a solution have proved unsuccessful. Until a solution is found the airline’s schedule for December is not assured" the union said.’


ALPA has advised its pilots to not show up to work when asked to fly during days off.

Air Malta has offered each pilot EUR360 for every day off that they were called in to work, however ALPA wants the days off missed in addition to the payment.


The case remains unsolved.


EXPANDING TRANSATLANTIC

Currently a small, short/medium haul airline, Air Malta will soon be expanding transatlantic, Mizzi revealed. Speaking on TVM’s Xtra, Mizzi talked about Air Malta’s future and explained how improving its cash flow is key over the next few years. New destinations will continue to be added and with that a more hopeful reputation.


Toronto and New York are reportedly on the list, following Air Malta’s first ever profit in over 15 years from the period ending March 31, 2018 (which are yet to be revealed, but are slim profits according to the Tourism Minister).


“It is important for Air Malta to focus on the main airports in Europe, Scandinavia, Cairo and the Middle East and in three to four years’ time we should have flights to New York and Toronto,” Mizzi said.


Additionally, according to Mizzi, the Air Malta fleet will be replaced with newer more efficient aircraft. Speculation suggests the Airbus A320Neo family will continue to grow its presence in the Air Malta fleet and will help phase out the older, less efficient Airbus A320Ceo jets.


By the next election, the Tourism Minister said, Air Malta will be a very different airline.


Soaring Into Better Times

Air Malta has suffered a lot this year but times are beginning to look better. With a modern fleet and bigger network envisaged in the future, Air Malta is starting to place itself as the airline of choice when flying to Malta. It does have a lot to conquer, including the pilot union, and with Ryanair continuing its expansion around Europe, profitability has and will continue to be difficult. However, if Air Malta can offer passengers something more than that of Ryanair, such as a more modern fleet, service and general product at a cheap fare, strong and continuous profitability is right around the corner.


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