Air Malta will be able to stand on its own two feet by March, the airline’s chairwoman Maria Micallef said yesterday.
Announcing a loss of €16.4 million for the financial year ending March 2015, she said the forecast for this year was a loss of €4 million.
However, under a five-year restructuring plan laid down in 2011, Air Malta has until March 2016 to return to the black in return for a State injection of €130 million.
Ms Micallef admitted yesterday this target would not be met.
But pressed to say what would happen after the end of State aid, she said no further subsidies would be necessary.
“According to our business plan, bar any unpredicted circumstances, we will be able to stand on our own financial feet from next March onwards.”
Air Malta, she said, would break even in 2017 and become profitable by 2018.
Interim financial results for the first six months of this year pointed in that direction.
Every expert we speak to is adamant: our workforce productivity in certain sectors must increase by at least 25 per cent
Asked whether the airline’s plans include a fresh private injection from the partial sale of Air Malta to another airline, Ms Micallef said the business plan did not include the strategic partner option.
However, she insisted that a strategic partner was the way forward for the airline and should be in place as soon as possible.
In her address, Ms Micallef repeatedly passed a subtle message to Air Malta employees that the dark clouds over the airline had not yet passed and that they needed to pull up their socks.
“Every expert we speak to is adamant: our workforce productivity in certain sectors must increase by at least 25 per cent, if we are going to grow to be competitive against other airlines,” she warned.
Tough negotiations with unions lie ahead over the renewal of collective agreements.
When asked to pinpoint those categories of workers which needed to increase their productivity, Ms Micallef avoided any direct reference to particular sectors. She also avoided questions on whether further shedding of the workforce is necessary.
The detailed financial results show that the airline took two major decisions that contributed to substantially cutting its losses in the last financial year.
These were the sale of Selmun Palace Hotel Company Ltd for €10.9 million to the government and the re-negotiation of its catering contract, which saw the company eliminating the free in-flight food service and start charging for hot meals.
The latter saved the company another €4 million.
Asked whether the sale of Selmun Palace to the government might land the company in hot water with the European Commission, as this might be considered as State aid, Tourism Minister Edward Zammit Lewis said this would not be the case.
This was what had happened “in other companies in the EU”, he said.
Air Malta yesterday confirmed it would be reducing its fleet from 10 to eight aircraft in winter, saving the airline millions of euros.
Ms Micallef said the airline would fly the same routes and carry the same number of passengers.
Through better utilisation of aircraft, the airline would also be able to do the same amount of work in summer without the need to lease any planes, she insisted.
Strategic partner not if but when
Times of Malta: What is the state of play in the search for a strategic partner for Air Malta?
Tourism Minister Edward Zammit Lewis: There are ongoing parallel discussions with various airlines to find a strategic partner for Air Malta. We are working every day on this and we are progressing.
TOM: Will the government still hold the majority shareholding?
EZL: Yes. That is our intention. We want the government to continue to have control over our national airline. So far we have nothing concrete, and when we do we will inform the public.
TOM: Do you have a target date?
EZL: There is no set target date as these are important discussions and I am not in a position to dictate. It takes two to tango. But we are progressing.