Last Friday, the Chairman of the national airline, David Curmi, lay bare the problems that have plagued Air Malta for the past 16 years. In a nutshell, the airline has lost €258 million in the previous 16 years, and there is no sugarcoating it.
With these losses piling up over the years, the airline sought to preserve itself by selling off all but one of its assets. It is currently dangling on a thread that, if snapped, might lead to the company’s demise, displacing around 900 people.
Accountants and auditors have refused to sign off on Air Malta’s finances since 2019, eight years after the company went into negative equity.
Curmi stated unequivocally that he had utilised all of his skills to attempt to halt the haemorrhage, much like a doctor on an operating table. Curmi, who took over in February 2021, provided an outline of a four-year strategy given to the European Commission in an attempt to pull Air Malta out of the red zone.
The strategy involved cancelling flights that were losing money, reducing 20 of the 40 itineraries, and saving €44 million. According to him, the network was responsible for 47% of the losses.
Like numerous other areas where the government has a stake in shareholding and operations, he openly recognised that another difficulty was Air Malta’s bloated personnel, which made its commercial department larger than that of the considerably larger Easyjet. The EU approved the latest state assistance in 2012, totaling €130 million. These, however, were quickly depleted as expenditures continued to rise.
To make problems worse, and not make them any easier or simpler to deal with, the COVID-19 epidemic struck a tremendous blow, with the airline receiving over 300,000 refund claims totaling €32 million, as well as 80,000 flight vouchers totaling €12 million.
A turnaround moment was expected for 2024 or 2025, however Air Malta was unable to replicate low-cost airline models since their expenses were so low. Instead, excellent service on profitable routes and flights to legacy airports would be maintained.
Aside from no longer handling baggage and operating from several locations outside of Malta, the cabin staff and pilots will also see adjustments to their flight hours. According to Curmi, pay will be based on how much time the Air Malta crew spends flying.