Air Malta reaps the fruit of courageous decisions
Air Malta is celebrating the delivery this month of the last two of a dozen Airbus A-319 and A320 aircraft ordered in 2002.Airbus A320 with registration 9H-AEP touched down in Malta on March 6 and was followed last week by sister aircraft 9H-AEQ.The...
Air Malta is celebrating the delivery this month of the last two of a dozen Airbus A-319 and A320 aircraft ordered in 2002.
Airbus A320 with registration 9H-AEP touched down in Malta on March 6 and was followed last week by sister aircraft 9H-AEQ.
The completion of the order marks a significant milestone for the airline because it is now built around one of the youngest fleets in service, with an average age of just 2.7 years. The airline also operates two Boeing 737 aircraft which will be phased out next year.
"Having an all-Airbus fleet translates into significant cost advantages for the company," Joseph Bugeja, general manager, network and fleet assets said.
"It means pilot and maintenance staff training can be concentrated on just one type of aircraft, staff deployment is easier, we will need to stock fewer spare parts and maintenance work is less frequent than older aircraft."
The A320 aircraft family incorporates the latest technology in avionics, communications and 'real time' maintenance monitoring along with fuel efficiency, high emission standards and noise levels which fall well within the most stringent regulations.
But the business advantages for Air Malta go well beyond what the aircraft can produce.
Fancy footwork by the airline in the immediate post-9/11 period, when demand for aircraft took a nosedive, meant that the company could take courageous decisions which will pay dividends for many years.
Rather than buying the aircraft Air Malta decided to lease them brand new from US-based International Lease Finance Corporation for 12 years, with an option to extend that lease or buy.
That not only meant a much lower initial capital outlay, but also low lease rates.
"Current lease rates for an A320 are 80 per cent higher than what we are paying," said Mr Bugeja, who had been in the negotiating team in 2002. "And each A320 costs $40 million."
That 12 aircraft were ordered in one go was also a risk - the airline only operated nine aircraft at the time and the future of air travel did not look rosy in early 2002.
But five years down the line, Air Malta has found that it needs even more aircraft for the summer, and while two Boeing 737s will be kept in the fleet this year, another aircraft will also be leased.
The airline had initially ordered seven A319s and five A320s but changed that to seven of the larger A320s and five A319s after a couple of years. The A320s are normally configured to carry 168 passengers with a full load range of 4,055 km while the A319s can carry 141 for up to 4,815 km, meaning they can fly with a full load to Dubai, a route which Air Malta no longer operates.
Deliveries started in January 2004 and were due to have been completed next year but have been brought forward.
Mr Bugeja said the changes to the order were dictated by market conditions, notably seasonality - during the winter because of over-capacity it is easier to fill and cheaper to operate the A319s but the scenario is reversed during the summer.
Indeed one of Air Malta's A320s last summer achieved the highest utilisation rate of any A320.
"We are fully exploiting the advantages of a young fleet," Mr Bugeja said.
This winter Air Malta wet leased two of the A320s to airlines in Chile and Libya but they will be back well in time for the summer.
Another two A320s are permanently based in the UK to operate charter services to various tourist destinations in Europe.
Mr Bugeja has fond memories of the process which led to the 12-aircraft order.
One of the earliest decisions taken after the airline board had decided on the requirements was that the aircraft would be leased from ILFC rather than bought, he said. That deal was reached after two days of intensive talks. Then, as happens in most airlines, a "campaign" was launched, pitting Airbus against Boeing and engine makers against each other.
"At the end we had the Boeing representative in one room, the Airbus representative in the other and we went to and fro seeking the best package. By and large the offering was similar from both companies, but the Airbus had more extras as standard," Mr Bugeja said, using terms normally reserved for cars. And ILFC already had Airbuses on order and they just had to be allocated to Air Malta, hence the early deliveries.
Mr Bugeja insists that although Malta was working for EU membership at the time, there was no government pressure to prefer Airbus over Boeing. "I was actually surprised at the lack of such pressure," he mused.
The "Airbus man in the other room" was Eric Jullien, regional sales director, who was on board 9H-ABP for its delivery flight. His success in winning the order was no mean feat since up to that time Air Malta had mostly operated Boeings, although it had two A320s in its fleet, delivered in 1990 and 1992.
"We did have some advantages. The A320 is not only more technologically advanced (than the 737) but it is also more comfortable for passengers," he said. "The seats are wider, there is more leg room in normal configuration, the overhead stowage bins are bigger and the aircraft features an in-flight entertainment system."
The relationship with Air Malta has been two-way, he added.
"Air Malta was an early customer for the A320 and we have since valued the feedback we have received from its crews."
Air Malta pilots, he said, had contributed directly to the development of the new "less paper cockpit" where much of the documentation has been replaced by computers plugged into the aircraft's systems before each flight, translating into time savings, efficiency and safety.
Experienced Air Malta pilots have also helped other airlines in Airbus conversion courses, notably in Russia and Armenia.
Mr Bugeja said there would be no let-up on the utilisation rate of the new aircraft over the coming months. Although the airline has discontinued its services to Dublin and the Lisbon route is now a charter service, the airline is raising its Rome operation to three times daily.
And the capacity problems experienced on the German route last year are unlikely to be repeated. Services to Dusseldorf will rise to six from four last year, those to Frankfurt will rise to seven, possibly even eight weekly from five last summer and extra flights to Munich will raise the weekly total on that route to nine. Flights to Berlin will operate three times a week instead of two.
The airline will also operate three times a week to Birmingham (from two last year) and also introduce twice weekly services to Liverpool, Venice and, hopefully, Benghazi. There will also be a direct service to Naples. Services between Catania-Munich and Catania-Geneva will also rise to three per week.
The next big aircraft order is still some time away but Mr Bugeja said a close eye will be kept on developments.
Airbus CEO Louis Gallois last week put the company on notice to start preparing for a successor to the hugely successful A320. Much will depend on the way technology evolves before Air Malta takes the plunge again. Mr Bugeja said one had to closely watch major new engine developments expected to be ready by 2014 and which could dictate the way future mid-size aircraft will evolve.
Air Malta can afford to wait, but it will be ready to take the plunge as soon as favourable circumstances present themselves, Mr Bugeja said.
Airbus A320 with registration 9H-AEP touched down in Malta on March 6 and was followed last week by sister aircraft 9H-AEQ.
The completion of the order marks a significant milestone for the airline because it is now built around one of the youngest fleets in service, with an average age of just 2.7 years. The airline also operates two Boeing 737 aircraft which will be phased out next year.
"Having an all-Airbus fleet translates into significant cost advantages for the company," Joseph Bugeja, general manager, network and fleet assets said.
"It means pilot and maintenance staff training can be concentrated on just one type of aircraft, staff deployment is easier, we will need to stock fewer spare parts and maintenance work is less frequent than older aircraft."
The A320 aircraft family incorporates the latest technology in avionics, communications and 'real time' maintenance monitoring along with fuel efficiency, high emission standards and noise levels which fall well within the most stringent regulations.
But the business advantages for Air Malta go well beyond what the aircraft can produce.
Fancy footwork by the airline in the immediate post-9/11 period, when demand for aircraft took a nosedive, meant that the company could take courageous decisions which will pay dividends for many years.
Rather than buying the aircraft Air Malta decided to lease them brand new from US-based International Lease Finance Corporation for 12 years, with an option to extend that lease or buy.
That not only meant a much lower initial capital outlay, but also low lease rates.
"Current lease rates for an A320 are 80 per cent higher than what we are paying," said Mr Bugeja, who had been in the negotiating team in 2002. "And each A320 costs $40 million."
That 12 aircraft were ordered in one go was also a risk - the airline only operated nine aircraft at the time and the future of air travel did not look rosy in early 2002.
But five years down the line, Air Malta has found that it needs even more aircraft for the summer, and while two Boeing 737s will be kept in the fleet this year, another aircraft will also be leased.
The airline had initially ordered seven A319s and five A320s but changed that to seven of the larger A320s and five A319s after a couple of years. The A320s are normally configured to carry 168 passengers with a full load range of 4,055 km while the A319s can carry 141 for up to 4,815 km, meaning they can fly with a full load to Dubai, a route which Air Malta no longer operates.
Deliveries started in January 2004 and were due to have been completed next year but have been brought forward.
Mr Bugeja said the changes to the order were dictated by market conditions, notably seasonality - during the winter because of over-capacity it is easier to fill and cheaper to operate the A319s but the scenario is reversed during the summer.
Indeed one of Air Malta's A320s last summer achieved the highest utilisation rate of any A320.
"We are fully exploiting the advantages of a young fleet," Mr Bugeja said.
This winter Air Malta wet leased two of the A320s to airlines in Chile and Libya but they will be back well in time for the summer.
Another two A320s are permanently based in the UK to operate charter services to various tourist destinations in Europe.
Mr Bugeja has fond memories of the process which led to the 12-aircraft order.
One of the earliest decisions taken after the airline board had decided on the requirements was that the aircraft would be leased from ILFC rather than bought, he said. That deal was reached after two days of intensive talks. Then, as happens in most airlines, a "campaign" was launched, pitting Airbus against Boeing and engine makers against each other.
"At the end we had the Boeing representative in one room, the Airbus representative in the other and we went to and fro seeking the best package. By and large the offering was similar from both companies, but the Airbus had more extras as standard," Mr Bugeja said, using terms normally reserved for cars. And ILFC already had Airbuses on order and they just had to be allocated to Air Malta, hence the early deliveries.
Mr Bugeja insists that although Malta was working for EU membership at the time, there was no government pressure to prefer Airbus over Boeing. "I was actually surprised at the lack of such pressure," he mused.
The "Airbus man in the other room" was Eric Jullien, regional sales director, who was on board 9H-ABP for its delivery flight. His success in winning the order was no mean feat since up to that time Air Malta had mostly operated Boeings, although it had two A320s in its fleet, delivered in 1990 and 1992.
"We did have some advantages. The A320 is not only more technologically advanced (than the 737) but it is also more comfortable for passengers," he said. "The seats are wider, there is more leg room in normal configuration, the overhead stowage bins are bigger and the aircraft features an in-flight entertainment system."
The relationship with Air Malta has been two-way, he added.
"Air Malta was an early customer for the A320 and we have since valued the feedback we have received from its crews."
Air Malta pilots, he said, had contributed directly to the development of the new "less paper cockpit" where much of the documentation has been replaced by computers plugged into the aircraft's systems before each flight, translating into time savings, efficiency and safety.
Experienced Air Malta pilots have also helped other airlines in Airbus conversion courses, notably in Russia and Armenia.
Mr Bugeja said there would be no let-up on the utilisation rate of the new aircraft over the coming months. Although the airline has discontinued its services to Dublin and the Lisbon route is now a charter service, the airline is raising its Rome operation to three times daily.
And the capacity problems experienced on the German route last year are unlikely to be repeated. Services to Dusseldorf will rise to six from four last year, those to Frankfurt will rise to seven, possibly even eight weekly from five last summer and extra flights to Munich will raise the weekly total on that route to nine. Flights to Berlin will operate three times a week instead of two.
The airline will also operate three times a week to Birmingham (from two last year) and also introduce twice weekly services to Liverpool, Venice and, hopefully, Benghazi. There will also be a direct service to Naples. Services between Catania-Munich and Catania-Geneva will also rise to three per week.
The next big aircraft order is still some time away but Mr Bugeja said a close eye will be kept on developments.
Airbus CEO Louis Gallois last week put the company on notice to start preparing for a successor to the hugely successful A320. Much will depend on the way technology evolves before Air Malta takes the plunge again. Mr Bugeja said one had to closely watch major new engine developments expected to be ready by 2014 and which could dictate the way future mid-size aircraft will evolve.
Air Malta can afford to wait, but it will be ready to take the plunge as soon as favourable circumstances present themselves, Mr Bugeja said.