The real reason Air Malta managed to balance its books between April and June was a late Easter and an early election, industry sources have told this newspaper.
The Times of Malta reported that Air Malta broke even during the second quarter of this year, for the first time in 10 years, but sources close to the airline have now said that “everyone at the company knows that without the election subsidies, the airline would have made another loss”.
Air Malta carried more than 2,000 ‘extra’ passengers during the last week of May and the first week of June as part of a subsidised scheme put in place during every election for Maltese voters abroad and their families to come home and vote.
“What happens normally through this scheme is that while passengers pay €90 for each flight, the government pays the airline the full price of the seat, with the airline making some €200 profit from every passenger it carries,” a source said.
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“An extra €400,000 bonanza in the months of April, May and June pushed profits up to the break-even point, considering Easter was in April.”
Air Malta sources said the national airline always makes a profit in the third quarter (summer) and slight losses in the second quarter (April to June).
“However, losses in October to February usually not only offset these profits but cause Air Malta to make a substantial loss, as fewer staff and planes are needed during these months.”
When asked about the break-even period, the government played down the news, insisting that the company is still in a critical situation and changes need to be introduced.
“The ministry will not comment on media stories and speculation,” said a spokesman for the Minister for Tourism, Konrad Mizzi.
“The financial situation is still extremely challenging, and the company is working to improve the revenue base, product offering and cash flow position.” Dr Mizzi’s spokesman underlined the crucial process of change that is under way, which “requires the implementation of changes to our commercial operations, as well as operational work practices”.
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This could be interpreted as a message to the unions representing airline workers.
In late June, just a few weeks after Konrad Mizzi replaced minister Edward Zammit Lewis at the helm of Air Malta, most of the board of directors, including chairperson Maria Micallef, was unceremoniously changed.
Dr Mizzi embarked on a new direction for the airline, diametrically opposed to that adopted by his predecessor.
Instead of trying sell the company – an effort which had previously failed – he said that he wanted to point the company in a new direction and make it profitable before putting it up for partial privatisation.
So far, no concrete plans have been divulged to the unions and top management.