Air Malta’s controversial decision to stop flying to Frankfurt as from March was taken by the government-appointed board of directors against the recommendations of the airline’s management, the Times of Malta is informed.

Senior Air Malta officials told this newspaper that since, according to the latest financial results, the Malta-Frankfurt route was making a ROS (return on sales) of more than 16 per cent, it was recommended that the airline continued to fly this route as it was one of its profitable ones.

“It is true that the airline is suffering as a result of reducing its fleet to eight aircraft, but Frankfurt should have been saved especially since it was making money. This apart from the importance of Germany’s main airport, one of the busiest in Europe,” the officials said.

After many years of flying this route, Air Malta decided to axe its direct link with Frankfurt stating that it was not profitable any longer. Instead, the airline decided to increase its connections to Munich while reducing frequency to Berlin.

The latest decisions have upset the tourism industry even though Lufthansa has already agreed to increase its flights on this route to compensate for Air Malta’s decision.

Air Malta officials told the Times of Malta that internal management reports show that, apart from the direct traffic, Air Malta was also generating money from increased passenger loads  as between 30 to 40 per cent of its passengers were using this route to access the vast interconnections operated by Frankfurt Airport.

Frankfurt should have been saved

“Even we were surprised when we learnt that the board decided to overrule our recommendation on Frankfurt. This decision is simply a mistake,” the senior officials said.

Frankfurt’s airport is the fourth busiest in Europe after London Heathrow, Paris’s Charles de Gaulle and Istanbul’s Ataturk. It is also considered the 12th busiest worldwide.

On Monday, the Times of Malta reported industry sources saying that Air Malta’s decision on Frankfurt was a result of a new codeshare agreement with Alitalia aimed at luring the Italian carrier to buy a 49.9 per cent stake in Air Malta.

The sources said that Alitalia has been insisting, since the start of ongoing negotiations, that one of the advantages of a deal with Air Malta was to use the Maltese airline to increase connecting traffic to its network in Rome and Milan.

This was also stated by Alitalia chairman Luca Cordero di Montezemolo who further said Alitalia won’t be investing a single euro in Air Malta.

Yesterday, Air Malta’s board of directors denied any connection between the decision to axe Frankfurt to the ongoing negotiations with Alitalia.

“The board strongly condemned such sensational reports stating that route and frequency changes are solely based on commercial considerations and Air Malta deploys its capacity on routes that provide the best possible return on investment,” an airline statement said.

Asked yesterday to state whether Frankfurt was a profitable route, an Air Malta spokesman said that, while this information is naturally sensitive and not divulged or published in the annual financial statements, the Frankfurt route had already been reduced from daily to four times weekly last summer.

According to a memorandum of understanding signed last May, Air Malta and Alitalia had to conclude a privatisation agreement by the end of August following a business plan drawn by Alitalia and Air Malta.

However, four months later, no agreement is yet in sight even though the government is insisting that negotiations are still ongoing.

Unlike the past years, when Air Malta held its annual general meeting in November, the airline has postponed its meeting and refrained from publishing its latest financial results.

'Unfounded, full of inaccuracies'

In a statement later, Air Malta dismissed the report as "totally unfounded and full of inaccuracies".

It said it was the airline management, principally the Commercial Division, that proposes the network and schedule that Air Malta will operate. These decisions are taken on purely commercial terms, although consideration is also given to the needs of the local tourism industry.

The airline board's role is to then approve the network plan.

"The management had proposed to stop the Frankfurt route during the presentation made to the board on October 6. Management's proposal was then endorsed by the board."

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