Air Malta has managed to cut its losses by €5 million between October and December last year, down from €9.8 million.

The national airline said the “steady financial progress” included a €4.2 million growth in revenue through an increase of 12,600 passengers, bringing the number carried during the period up to 377,951.

It said that although it had registered an operating loss of €8.5 million, after adding the restructuring costs and interest, this was still €3.4 million better than the loss of some €12 million registered in the same period in 2011.

The result was in line with the financial projections made in the Restructuring Plan accepted by the European Commission in June last year, the national carrier said.

Brussels had approved the five-year plan that will see a €130 million State aid package injected into the troubled airline.

Chief executive Peter Davies said the results continued to confirm that the carrier was on its way to recovery.

“Each and every action we have taken over the past two years was aimed to increase revenue and reduce costs.

“We are substantially on track in our revenue targets but much more needs to be done to reduce supplier costs.”

He said the company would now enter into the second phase of development, which included a significant overhaul of business processes in the finance, cabin and ground services divisions.

“This is aimed at developing a more customer-centric experience that will require the vital and responsible role of our employee unions as well as a change in management structure that will be announced next week,” he said.

Mr Davies said challenges for Air Malta were still significant as it aimed at achieving its targeted operating break-even figure next year.