Air Malta’s chairwoman Maria Micallef speaking last night. Photo: Matthew Mirabelli

Politicians were warned to “hold back” by Air Malta’s chairwoman if the airline was to survive, after the company’s restructuring plan veered off track.

Maria Micallef told the airline’s Annual General Meeting yesterday that Air Malta needed everyone’s support to ensure it turned the corner in 2016 as planned.

“In some cases, this means holding back. That is my message to politicians, both government and Opposition,” she said.

The same applied for all stakeholders, she added.

Asked to expand on her comment, she later said the board and management had to focus on the commercial aspect.

“This is why I am asking politicians to let us work.”

Air Malta halved its losses to €16 million in the financial year that ended in March but was projecting a similar loss in the financial year ending in March 2015.

The reality is that this is Air Malta’s last chance for long-term survival. We have 17 months left to get this right

The airline must return a profit by 2016, according to a restructuring plan agreed with the European Commission, which should have seen Air Malta break even by next year.

“The reality is that this is Air Malta’s last chance for long-term survival. We have 17 months left to get this right,” Ms Micallef said, adding she was confident the airline could make it.

Asked to comment on a recent statement made by former CEO Peter Davies, who said that when he left the company it was on track, Ms Micallef insisted the only year results were in line with the restructuring plan was 2012.

“Numbers are not subjective,” she said, adding her interest was to look ahead.

Ms Micallef said the current financial year had been directly hit by the closure of the Libyan routes and increased competition during the peak months.

Air Malta was reviewing the security situation in Libya on a daily basis but Ms Micallef ruled out an immediate return to Mitiga airport in Tripoli, as was suggested by the Libyan press.

She said management was informed that revenues would be hit by 10 per cent and losses forecast at €25 million in March 2015 unless immediate preventive action was taken. “We set ourselves the target that under these circumstances we will try to target a bottom line loss of €16 million for year ending March 2015,” she said.

Ms Micallef insisted the divestment of Selmun Palace Hotel and Osprey Insurance Brokers, two subsidiary operations, had to be concluded by the current financial year in line with the reform plan.

‘We will need economies of scale we can never achieve’

However, looking beyond the term of the restructuring plan, she said the airline’s profit margins would always remain “wafer thin” unless the company rethought its business model.

“We will need the economies of scale that we can never achieve with our size,” she insisted.

Air Malta CEO Philip Micallef, who was only recently appointed, said his management wanted to work much more closely with the Malta Tourism Authority and other key partners.

He said early bookings for winter strongly indicated that the airline could start to mitigate the losses in passengers from Libya and the slow-down in Russia through increased sales on other routes.

“We continue to follow developments in Libya on a daily basis to start flying there the moment it is safe to do so,” Mr Micallef said.

The airline also had to improve its IT systems to facilitate the customer experience and increase revenue by providing a more attractive pricing system for passengers, he added.

Mr Micallef said the airline would also respond to increased competition by tapping additional revenue streams.

“We are starting with generating ancillary revenue pre-flight through product enhancements... we are also looking at developing ancillary products while on board.”

Air Malta is expected to start offering day-return flights for shopping, football and other sports events and for Brussels.

But the airline is also taking various cost-cutting measures including transport expenses, in-flight catering on charter flights, rent and utilities. “These measures implemented in September are expected to give substantial savings,” Mr Micallef said.

The airline will also shift its focus from baggage weight to pieces, which the airline believes will rake in additional revenue.

Tourism Minister Edward Zammit Lewis said the government was committed to saving Air Malta and urged all stakeholders to pull in the same direction.

Air Malta’s figures

*The financial year ends in March
**Forecast