Air Malta’s first profit since 2008

Air Malta yesterday announced its first piece of good news since 2008: an operational profit of €400,000 for the first half of the year.

This was mostly due to increased revenue and lower costs, including better-priced fuel. The last time the airline recorded a profit was four years ago and returning to the black implies that the restructuring plan being implemented is working.

“These figures are the result of the efforts we have put into the restructuring of Air Malta,” said CEO Peter Davies. “The concerted effort has reversed the trend of the past years and, finally, we are reaping financial gains.”

Air Malta registered an €8 million loss in the same period last year, which means the airline has climbed back by €8.4 million.

These “interim results” also mean that the airline is €1.4 million ahead of budget, Air Malta said in a statement.

“Both passenger and cargo revenue were the main growth factors contributing to an increase of €2 million over the corresponding period last year,” it added.

Air Malta had projected a much more modest showing in its restructuring plan, approved by the European Commission. Its revenue for this year had been forecast at €4.7 million below what was registered, primarily because of plans to reduce routes, which led to a 10 per cent cut in offered seats.

Air Malta handled 1.05 million passengers during this period (ending September), a slight reduction over last year’s 1.1 million.

The seat capacity reduction was counteracted by successful efforts to fill planes, measured through the “passenger seat factor”. This increased by two percentage points to an average of 79 per cent.

The carrier reduced costs in various areas during the period under review, including a €3.2 million cut in fuel costs and €2.2 million on personnel. However, Mr Davies warned that the second half of the year, which includes winter, would be “undoubtedly tougher” due to Malta’s seasonality, diminishing hopes of registering another profit.

He said the airline still had a long way to go in cutting costs, even though expenditure fell by €6.4 million over last year’s figures.

“It is imperative that we renegotiate terms with our major suppliers to continue reducing overheads and losses.

“Not only that, we need to start offering passengers an improved and value-for-money customer experience in line with today’s trends and service levels.

“This is not only imperative for us but also for our partner suppliers, whose business is also tied with the restructuring and the return to profitability of Air Malta,” Mr Davies added.