Air Malta’s res­tructuring process has now reached a very important juncture, which should see the national airline placed on a solid footing in the coming months.

We are aspiring for a safe landing, soon. We certainly cannot afford otherwise!- George Micallef

Despite a projected loss of about €37 million for this year, as recently announced, the results reflect an improvement in the company’s performance over last year. This time last year, we were promised the completion of a restructuring plan and advised that its implementation was planned for May 2011 subject to the European Commission’s approval. The Commission is now expected to give its final decision sometime in the middle of next year.

During my tenure as president of the Malta Hotels and Restaurants Association, I always maintained that the association is in no position to advise Air Malta how it should restructure its organisation. However, I insisted that, as a main stakeholder with massive investments at stake, the MHRA expected to be consulted and be kept informed, particularly when it came to commercial decisions, together with other stakeholders and, especially, the Malta Tourism Authority. However, there has since been very little interaction with the main stakeholders, including the MTA. In fact, most of the important decisions taken by the national carrier were learnt through the media or third parties.

The MTA is mainly responsible for marketing Malta and is expected to negotiate and work with tour operators and airlines, among other parties, in an effort to maximise bringing visitors to our shores. Yet, the MTA is practically unaware of decisions taken by Air Malta and much less of its plans, even though the carrier is responsible for over 50 per cent of tourists. This makes it difficult for the MTA to plan ahead and to fill gaps and make good for seats or routes dropped by Air Malta.

Throughout these past 12 months or so, the MHRA has intervened and communicated on countless occasions about this problem directly with Air Malta’s top management, its chairman, with the MTA board, with the Parliamentary Secretary for Tourism, the Minister of Finance and also with the Prime Minister. Although everyone was very understanding, to date, the problem persists.

Every time we discussed the issue, we were reminded that Air Malta’s situation is a delicate one, now in the hands of the European Commision. But the EU is surely not suggesting that Air Malta refrains from working with the MTA or not talk to stakeholders.

Earlier this year, the government appointed a new board of directors and engaged foreigners at the helm to manage the national airline. What is of particular concern is that Air Malta’s top management seems to be taking decisions without sufficient consideration of the impact these may have on the tourism industry at large.

I have no doubt that the management’s intentions are genuine and, although the individuals concerned may be experts on the restructuring of airlines, they do not possess the intrinsic knowledge about Malta as a tourism destination and its “historical” past or Malta’s areas of susceptibility. This makes it more important that they consult the MTA and other stakeholders but it is indeed worrying that they are not.

As expected, Air Malta’s management seeks the board’s approval on important decisions but, although the board’s members’ credentials are above question, the board lacks the expertise necessary to challenge decisions taken by management and determine how these can affect the tourism industry. It would have been more appropriate had the MTA been given a seat on Air Malta’s board, not only because of its expertise and strategic relevance but because the MTA represents the national interest.

We have been told on a number of times that Air Malta’s decisions need to be guided by the best commercial interest of the company, which may not always be in the best national interest. But, by the same token, why isn’t the MTA allowed to do the same and take decisions in the best interest of tourism?

As things stand now, the MTA’s hands are tied and it is not allowed to freely negotiate as it may deem necessary. The government has to ensure that the benefits accruing from saving the national airline are not achieved through losses in the tourism sector and the economy as a whole. It needs to set a clear policy in this regard and the MTA must be kept fully informed, otherwise it will not be able to function properly. It is difficult to understand why the government accepts that the Tourism Parliamentary Secretary and the MTA are kept in the dark about Air Malta’s plans when they are both strategically and massively important for tourism.

The MTA has been supporting Air Malta in no small way for years, and so it should, but the MTA will find it increasingly difficult to continue doing so if this situation persists. Recently, the two organisations have been channelled to hold regular meetings but in the absence of a genuine sense of cooperation things will not work out.

That these two institutions work independently is not in the best interest of the nation, after all they should ultimately follow a common tourism strategy that best sustains this important pillar of our economy.

A solution must be found for the MTA and Air Malta to work closer together to safeguard Malta’s best interest without jeopardising each other’s objectives, especially given the challenges ahead of us next year. Even the fact that the MTA is kept abreast of Air Malta’s plans would prove beneficial.

Over the coming months, all stakeholders should strive to work with the government to conclude the process and determine what the future holds for the national airline and, indeed, our economy.

Meanwhile, we all anxiously wait. On the forefront are Air Malta’s employees, alongside thousands more whose livelihoods depend on tourism. There are hundreds of tourism businesses, massive investments and various sectors of the economy at stake.

We are all on board this Air Malta plight and the government is in the cockpit. We are aspiring for a safe landing, soon. We certainly cannot afford otherwise!

The author is a former president of the Malta Hotels and Restaurants Association.

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