In his first speech as president of the Malta Hotels and Restaurants Association, Matthew Pace is reported to have said that if Air Malta were to collapse, the tourism sector would lose its soul and the economy would fail.

For the association president to make such a statement, it would seem that he knows more about the financial situation of the airline as it stands at present than most others. Or, maybe he is reacting to unconfirmed reports that the airline is set to lose €30 million in the financial year ending March next year.

Whatever the financial results may be, Mr Pace is right in describing the airline as the soul of the tourism industry but, if the worst comes to the worst, should Air Malta not consider the possibility of negotiating a partnership, or a merger, with a profitable airline before harm is done to the economy? It would certainly not be the first or last airline to make such a move in today’s sharp competitive climate.

Air Malta gets a lot of flak from disgruntled passengers, but it is equally praised for its service by thousands of others. The airline can hardly be compared to low-cost airlines since these were, and still are, in a position to drop the island from their route list any time they want. Air Malta has been a kingpin in the development of the tourism industry which today employs thousands of people and makes a significant contribution to gross domestic product.

It would be a massive loss if Air Malta were to collapse, more so after the great efforts that have gone into the restructuring plan agreed upon with the European Commission to save it from bankruptcy. In 2010, the Commission had authorised a loan facility of €52 million for Air Malta as rescue aid.

Operating losses had been reduced but it would appear that they are now rising again, leading to speculation that the airline might not be able to break even by the target date, which is 2016.

Only last month, the airline said it was once again finding itself under financial pressure due to increased competition and the suspension of flights to Tripoli, one of its most profitable routes.

How bad are these pressures? Are they bad enough to put the airline off course? Air Malta has had some new appointments, nothing extraordinary in the life of a business organisation. But it would seem that it now needs some stability at the top end of its managerial structure in order to be able to concentrate on the job in hand. A comment to the effect that the airline had begun a drive to rebuild its management team sounded a bit out of place when the management team ought to have been kept in top form all the time.

When he spoke about the airline, the MHRA president also remarked that the Air Malta challenge was not confined to the operators of the airline but had to be shared and supported with a great sense of urgency by all stakeholders.

With Air Malta having been such a key player in tourism, this is what the country expects from all stakeholders. However, if it is ultimately found that the airline is unable to make it on its own, it would seem that the best course to take is to seek a partnership with another airline that would offer the same reliability of service to an island that without such an air link would become isolated.

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