Air Malta: New management should provide explanations - PL spokesman
Video: Mark Zammit Cordina
The salvation of Air Malta is paramount for the airline and the tourism industry, PL spokesman Gavin Gulia said this afternoon in his initial reaction to the European Commission's report on the proposed restructuring and the minister's reaction to it.
Dr Gulia said that reacting to a report in The Times, the airline had, only yesterday, said that its slots at Heathrow and Gatwick airports, which gave it a competitive advantage, were not for sale.
But in its report today the EC confirmed that Air Malta was offering to give up these slots and others by 2013. A clarification was required, he said, as giving up these slots would negatively affect the business sector.
Dr Gulia said the Labour Party hoped the restructuring process would be successful but said that had the restructuring report been drawn up as it should in the first place, time would have been saved.
The fact that the EC had expressed doubts showed that proposals had not been well thought out and time was essential. Someone also had to shoulder responsibility for the report.
He noted that not only was the Opposition not consulted, it was not even kept informed. Dr Gulia said he submitted many parliamentary questions on aspects of the process and the reply always was that the information being requested was commercially sensitive and could not be given.
Dr Gulia said that there was now the Commission's public reaction to a report, the contents of which were not known.
He noted that it was positive that the Commission was accepting the argument that air travel was essential for a country on the periphery such as Malta.
However, it had expressed doubts on how realistic were the government's long term projections.
In its report, for example, the government did not say how Air Malta was planning to return to profitability in five years and the Commission wanted an explanation.
He asked about the transparent of the process with which subsidiaries were being sold and said it was preoccupying for the industry that certain routes were being halted.
Air Malta was responsible for 50 per cent of seat capacity to Malta, the other 50 per cent were from other legacy airlines and low cost carriers.
The airline, which was vital for the long-term sustainability of the tourism industry had last summer reduced seat capacity although the load factor increased.
There was scepticism, Dr Gulia said, on how it could keep the load factor on a reasonably good level in the medium to long term.
He noted that there seemed to be a lack of consultation between Air Malta and the Malta Tourism Authority and said that the minister responsible for tourism had admitted this himself.
Dr Gulia said that the new airline management were being paid millions and had he been minister he would have called those responsible and requested an explanation.
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Lawrence Fenech
Feb 22nd 2012, 09:09
Is-soltu, mhux fl'interess tal poplu bhal pagi.
E. Azzopardi
Feb 22nd 2012, 08:29
You should all be working together to save this blessed airline and not criticize each other. Remember, you are all doing what you are doing for the interest of the country. Now what makes me NOT believe that, whoever says it.
Lawrence Fenech
Feb 22nd 2012, 09:11
@ Azzopardi.
Idea tajba ghal-Gonzi li issa ghalaq il-parliament, nahdmu fl'imkien. Hallina.
paul bartolo
Feb 21st 2012, 21:33
Air Malta must first compete with the likes of Ryan Air. Reduce the air fair and take a gamble of filling all those seats on a daily basis. We come home once a year .For years,we have always flown with Air Malta from Heathrow Airport. This year, I have been trying to book but found that it has just become far to expensive to fly with Air Malta. My problem is that I refuse to fly with any other airline, result is that it looks very unlikely that we will be coming home this year.
George Cauchi
Feb 21st 2012, 20:56
Sale of prime slots in foreign airports should not be allowed by Government and Top Management should be challenged if they are suggesting this. Once these prime slots go their is no chance of getting them back. The EU has done a lot of damage to our National Airline by prolonging its decision to give its blessing to the rescue plan. In the meantime we keep giving subsidies to our foreign competitors and push our National Airline further down the road to ruin. The PL should do more to bring Government to task over this issue whilst all of them brag over the strategic importance of our National Airline, our National Airline goes further down the road to ruin. We give guarantees to the Greeks and European Banks to save their hide and yet we cannnot have a say in saving our National Assets.Well I can hear a distant voice telling us ' I told you so' .
Lino Busuttil
Feb 21st 2012, 19:16
C Farrugia, Privitisation would only work if REAL investment would be forthcoming in the Airline from the new owners, unfortunatley you might not be aware that even the Free Port which we think is private and independent is has some 212 millions in Euros of Governement guarnteed debts. Wrong on Legacy Airlines. Most airlines have in fact retained or invested in Ground Handling. Air France, Corse-Air, Lufthansa and Alitalia to mention a few. Air Malta is even handled by Alitalia Ground company in Heathrow for example. Air Malta's problem is not ground handling but unfair competition from Ryan Air which receives subsidies blessed by the EU, bad management, corrupt or incompetent contracts with service providers and 20 million of hidden expenses never explained in audited accounts. Also today, on the sale of slots issue, someone is taking us for a ride, the EU or the CEO.
Adrian Attard
Feb 22nd 2012, 08:14
Dear Mr Busuttil,
What do you mean with "20 million of hidden expenses never explained in audited accounts"?. This allegation is really serious and if so this issue should be brought forward for thorough investigation. May I remind you that the preparation of audited accounts is the sole responsibility of the management of the company. If you or your union have substantial evidence in hand about these Eur 20 million hidden expenses, there it is your obligation to bring them forward to the top persons in charge within the company.
Also, with regards to the subsidies given to Ryanair, as far as I know during Mr L Zammit's tenure, KM had the opportunity to apply for new routes which were subsidised, something which the company did not venture into for unknown reasons. Also, as you know Ryanair are not competing directly with KM on its main routes. It is Easyjet who are competing directly mainly on Rome, Milan and Gatwick but according to the Finance Minister no subsidies are being given to Easy on these routes.
With regards to Ground Handling, KM used to handle other airlines but after a new competitor entered the scene, these carriers shifted with the other competitor since the service was cheaper. I do not think that the service is better than that given by KM ground handlers. Simply it is cheaper, something which KM is trying to emulate today.
Carmel Farrugia
Feb 21st 2012, 18:28
There is only one solution to situations like this, this country cannot afford to have another Dockyard which milked millions from the Maltese people. Close Air Malta and re-open with new shareholders and new systems new work practices and without ground services. We should look at the experience of other companies vide Sabena, now Brussels Air, Alitalia now Alitalia CAI, and Swiss Air now Swiss International Air Lines. Why cannot our politicians learn from their own mistakes. Throwing good money after bad like we did at the drydocks for years will only make matters worse.
Joseph Calleja
Feb 21st 2012, 19:12
They call that POLITICS and MORE POLITICS.
D. A . Agius
Feb 21st 2012, 19:22
Yep, fire the foreign and local bosses, high street consultancy firms, which rake in millions at the expense of any profits made in operations.
Put instead productive (not political) people, starting with current employees willing to take the base salaries and let them share in profits if they manage to make them in a co-op way, with themselves taking in suggestions and consultancies made to improve Air Malta's business, not someone else's.
Secondly, LCC airlines have brought about a service for many Maltese and Tourists alike which was desired and is being used. Fighting them is no way to win, and as they say, if you can't beat them, join them. Air Malta should offer some routes in the LCC model to improve its profitability, but that's only going to come if no one else puts his fingers into the pie. And that means that Air Malta needs to be supported on such routes with the same way LCC's are supported through airport concessions and Government payouts / subsidies, which at the end of the day, it's the taxpayers who fork it! Maybe having a new low cost arm could be evaluated, shifting some of the airplanes and staff.
Unfortunately, now that the proverbial human waste has hit the fan, it needs to be redressed within what the EU will decide, for which "Close up and go home" would probably be the easiest and possibly most beneficial answer as the big lobbies would have their day, eating into that 51% share and then be free to do whatever they like with our air transport options.
Joseph Calleja
Feb 21st 2012, 18:25
Mr Gulia if you really are expecting a straight answer from Air Malta Executivess and form the government, all I can say is. 'HOSS FL--ILMA '. While you are at it, ask them why they need a new office building when they are in such deep doodoo. And as aslap in the face also ask them how they managed to sell some property that already belongs to the government, sell it to the government that owns that same property. If you think it is confusing, it is for us second class citizens too. Wooooooooosh..
Mario Giuliano
Feb 21st 2012, 20:11
Just for correctness sake ... it is "HOZZ FL-ILMA" from the verb "hazzez" = to scribble. Incidently the letters "z" are the ones with the dot on them :))
m farrugia
Feb 21st 2012, 17:19
saw gulia and demarco on bondiplus last week - gulia as always arrogant and devoid of any ideas, demarco full of energy, clear and innovative ideas, optimism and above all achieving positive results in tourism in such difficult worldwide economic circumstances.
Carmel Cilia
Feb 21st 2012, 18:19
Il vantagg li kellna fit turismu siehbi gie mhux biss sahha ta Demarco izda bl'inkwiet li kien hemm fl-Afrika ta fuq u jekk joghgobkom tibqawx tippruvaw taghhtu ix-xemx bl-arbiel. Il-kwistjoni hi fuq l-airmalta kumpanija li kienet taghmel miljuni qliegh u illum spiccat bhal ma spiccaw il-baqar jehelbu li kellna: Il-Mid Med, l-Enemalta, It-Telemalta is-Sea Malta fost l-ohrajn. Mela gvern mimli idejat kif jissellef aktar u aktar imissek ghidt. Ghas sur-Gulia Jien nahseb li flok jitlob spjegazzjonijiet bil fomm ahjar imur naqra lura fl-istorja u jipprova jorganizza protesta ghal dan l-isfregu kollu li ghamel dan il-gvern. Il-Poplu ghandu jzomm lil politici kolla responsabbli ta ghemilhom jew in-nuqqas ta ghemilhom. Il-Holm illum spicca fuq iz-zewg nahat.
pat muscat
Feb 21st 2012, 17:13
Its ok for us to bail out European banks from their Greek liabilities but not ok (for us) to bail out our own airline? Imnalla dhalna fl-ewro!
Philip Hili
Feb 22nd 2012, 01:14
@ Pat Muscat
Taf li qieghed tghid hmerija!
pat muscat
Feb 22nd 2012, 21:03
Read between the lines Mr Hili. Hmerija kienet :il-hofra hrafa, finanzi fis-sod, ir-ricessjoni mhix se tilqotna, u iz-zieda minn taht tal-500 mitt ewro fil-gimgha!
Please choose the reason of your report below: