Finding our future in the past

Last July, Air Malta CEO Peter Davies stated that “we have no rear-view mirrors, we need to acknowledge the past but prepare for the future” (Capa online). He is right because his job is to ensure the successful restructuring of our national airline.

The challenge is to give Air Malta a clear sense of direction...- Joseph Vella Bonnici

For us Maltese it is a different story. We have a right to know why the situation at Air Malta has been allowed to deteriorate to such an extent. Air Malta belongs to the Maltese people who paid for it through their taxes. It was only entrusted to the government so that it would be well-cared for.

Air Malta’s charter states clearly that its primary aim is to operate air transport services to serve the national interest. Air Malta is first and foremost a “public service provider”. Still, unlike PBS, for example, it has never received government money in compensation for its public obligations. This consideration should have underpinned any restructuring proposal submitted to the EU.

Up to some years back, Air Malta was a profitable carrier, which made our small nation proud. Then, things started to go wrong, bringing the group to the verge of bankruptcy. Air Malta was not the Malta Shipyards and, yet, the end result has been very much the same. We are now told that Air Malta needs to cut costs and to shed almost half its workforce. Final approval for the restructuring plan from the EU is still awaited.

Air Malta employees are once again showing a great sense of responsibility. Seven years ago they had agreed on a package of austerity measures intended to return the company to viability. That their sacrifices failed to achieve the desired results is no fault of the employees.

Air Malta has to find some €20 million to make good for the proposed “voluntary” redundancy schemes. Air Malta needs a further €52 million to be able to pay back the rescue-money injected by the government last year. Only then will the government provide Air Malta with another loan of €20 million.

It is augured that Mr Davies and his team will deliver. Experience has shown that getting foreign top management and paying them big money is no guarantee of success. Remember Malta Shipyards and Maltapost?

It seems strange that those same people who campaigned hard to get Malta to join the European Union, boasting that they trusted the capabilities of the Maltese, now seem to have changed their minds and only have absolute trust in themselves.

It was inevitable that the previous top management of Air Malta resigns, even though there lingers a general feeling that they served as scapegoats. But what about the chairmen and directors that served on Air Malta’s board? Did anyone of them stand up to be counted? Were they not aware that the industry’s structure was changing, that the introduction of the air route development scheme (Ards) would impact negatively on the airline’s profitability?

We will probably never know what measures they recommended to the government as the low-cost airlines continued to aggressively capture local market share.

Were these gentlemen not responsible to oversee the numerous contractual obligations made by Air Malta, and which, we are now told, have not been in the best interest of our national carrier?

Who was responsible for the decisions to purchase the RJ70 Avroliners and to set-up AZZURAir, both of which financially crippled the airline? Is this the level of transparency and accountability that we have in our public corporations?

Has any minister assumed political responsibility for the mess that Air Malta is in?

Why did the government leave it so late to intervene? Or was the government happy so long as Air Malta served as a “maximum capacity provider” for the tourist industry? Why did the government insist that the national carrier continues to operate routes, such as the Damascus one, even though they had no commercial value?

Air Malta is another glaring example of the mismanagement of our government, with its consequences being more serious than ARMS Ltd and Arriva put together. In the circumstances, the least that the government can do is to stop interfering with how Air Malta operates. If it wishes a more positive role, it should urgently commission a comprehensive aviation policy that incorporates Malta’s transport, economic and travel needs. This will set the framework within which Air Malta can set its own strategic direction.

The government should also ensure that there is synergy and convergence in the strategic thrust of the tourism authorities and our national carrier. Air Malta should be allowed to compete on a level-playing field, be remunerated for its “public” services and be eligible for Ards on the same basis as the low-cost carriers.

The restructuring of Air Malta should not just be a downsizing exercise. The challenge is to give Air Malta a clear sense of direction, reposition it on the short-haul market and win back the full commitment of its employees. This requires a serious business plan and not taking ad hoc measures such as the recently-introduced (and soon withdrawn) €10 surcharge on special dietary in-flight meals.

Mr Davies will do well to continue working for the future. It is the government that needs to come up with answers on Air Malta’s past and present.

fms18@onvol.net