(Adds MHRA statement)

Air Malta’s fleet maximisation plan will save the airline €41 million over the next five years, the company said today.

It said this could be seen from workings that were presented to the Malta Hotels and Restaurants Association by Air Malta, which showed how its fleet renewal plan would save the airline €8.2 million per year while flying the same number of passengers.

“Airplane utilisation is a key performance indicator in the industry. Since airplanes are expensive to lease, the more they are used, the higher the return.

“It does not make sense to leave such expensive assets idle in winter for more than half of the time,” CEO Philip Micallef said.

 “An annual saving of €8.2 million is the single most significant change that could help the airline break even. Many contracts have already been renegotiated, making this a key step of this important process,” he said.

Competitors EasyJet and Ryanair flew each of their aircraft between 15 and 16 hours at peak, compared to Air Malta, which flew its aircraft for only 12 hours per day at peak in August.

Air Malta’s new plan is to raise peak flight utilisation to 14 hours per day per aircraft, while continuing to fly the same number of passengers, and potentially more.

This did not jeopardise summer’s peak traffic because additional aircraft could be leased in August if the normal fleet did not cope with the added capacity.

 “Today we have a fleet that caters generously for the summer period but we are losing all our profits in winter when we do not need such a large fleet.

“We urgently need to change the model and create an optimal fleet that covers most of the year, with potential to add capacity as necessary.

“This will save money without negatively impacting any other aspects of the operation, except that everyone at Air Malta has to work more efficiently,” Chief financial officer Klaus Gossler said.

“If we do not implement this change as soon as possible, Air Malta will not break even and make the desired turnaround expected so eagerly by the Maltese,” he added.

MHRA said in a separate statement it continued to fully support the national airline given its importance to the tourism industry and the economy.

It hoped that the plans announced by Air Malta would be realised.

“What, however, remains critical, at a strategic level, is a change in the business model in the way Air Malta is owned to ensure that all these efforts will ultimately ensure further sustainable growth and improved competitiveness.”