Air Malta registers €30 million operating loss
Airline's performance dented by rising fuel prices and capacity reduction.
20 July 2012, 12:00am
Jurgen Balzan
Jurgen Balzan
2 min read
Air Malta has had to reduce its flight capacity and route network by 10% in 2011 and another 10% this year.
National airline Air Malta registered a €30 million operating loss at the end of its financial year in March 2012, registering an improvement of €4.3 million over 2011.
Airline chairman Louis Farrugia said the year's performance was adversely affected by €21 million in total losses, namely incurred by increased fuel prices of €17 million and €4 million losses from the reduction in flight capacity.
As part of its restructuring programme, which this year was green-lit, by the European Commission, Air Malta has had to reduce its flight capacity and route network by 10% in 2011 and another 10% this year.
Farrugia said that the target for the current year was to reduce the loss by half to €15 million and break even by 2015.
The chairman said that Air Malta had also negotiated a strong hedging agreement to buy 79% of its fuel at $108.75 which is 3% better than the average hedged price obtained by the competition.
The revenue from airline operations increased by €7million to €214 million.
As part of the Restructuring Plan the airline has committed to a reduction in flight capacity of around 20%, 10% in 2011 and another 10% in 2012.
However, Air Malta managed to increase its revenue through a number of commercial initiatives that included improved yields of €105 per passenger compared to €100 per passenger in 2011, improved seat factors of 2%, together with the commencement of various ancillary revenue initiatives.
During this year Air Malta carried 1.76million passengers a slight drop from 1.82million registered last year.
Farrugia added that during the current year Air Malta will continue pushing forward a number of projects specifically related to cost reductions whilst spearheading new revenue enhancement projects
CEO Peter Davies said the company has initiated several discussions with its key suppliers including Lufthansa Technik, Malta International Airport and SITA and achieved contractual savings of €8million per annum.
He said similar discussions are currently underway with the World Aviation Group, SkyGourmet and Sabre.
Davies added that Air Malta is in the process of implementing a new pricing system. Other revenue enhancement initiatives include targets to increase the yield per passenger, and increase the load factor by another 2.3%.
Early and voluntary retirement schemes have reduced full-time complement from 1,249 to 1,026 and is further expected to reduce to 923 employees by March 2013.
"As part of our restructuring there will be no further capacity and slots reductions. We have already achieved these targets, and the target for next year is to reduce our operating losses by half," Davies said
Finance minister Tonio Fenech said the airline had been in a very difficult position before the European Commission's approval of its restructuring plan, sending a message of trust in the airline's future. "We believe government has brought in the right people to run the company, and we won't be interfering in its running."
Jurgen Balzan was a MaltaToday reported from 2011 to 2017.
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Hu kumbinazzjoni li l-Air Malta bdiet titlef il-flus minn meta l-Mia bdiet taghmel il-profit?? Il-mistoqsija tehtieg risposta oggettiva.
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Peter Davies its time for you to go back to wherever that amateur accountant found you.
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Gejja r-repetizzjoni tat-Tarzna. L-ahhar daqqa tal-mewt minghand barrani. L-aqwa li ma jkunx cuc Malti.
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La l-AIR MALTA ghamilha il-PARTIT LABURISTA..ejja ha neqirduha..kollox qerdu ta zmien il-labour.
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So with incompetent English "cuc" running the show, we can continue pouring money into this financially failing company?
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Peter Davies is not a cuc Malti, he is a sweet softly incompetent not Maltese though. Please employ my 84 year old Auntie she done well in Nuna school up to 14yrs old, she knows the whole alphabet, and adding form one to ten. Please she can do better job and save millions from the tax payers money and she does not need to carry all her family, friends and friends of friends with thousands and thousands of Euros consisting of high wages for all this accounted loss. I beg of you dear Minister Tonio Fenech, or you are only interested on how the transfer market is going to hit Arsenal these days?
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And all these immense losses for a small local airline that once under those "backward" labour managers and political direction was profitable. Then, over the past 25 years, we installed those bravi, "pious-look-over-their-noses" Nationalist managers and directors and the result is a combined negative net worth of a bllion euros. Worse than the dockyards!
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It could have been less considering the wages the foreigners are getting. A cuc malti could have done better if the right man/woman was chosen.
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What do you expect with all those High Salaries, Bonuses and allownces for the ELITE?
Are we paying €500,000 to Mr Dqvies to get these results?
How come Air Malta used to make Profits under the Labour Government?
Those who did wrong should be brought to book and Justice Done, after all its our money and not theirs.
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Ghal li jista ikun...XI CUC MALTI QEGHED IMEXXI LIL L-AIRMALTA.Kompli gib l-iskuzi Tonio...Ghaliex ma twarrabx, u ghati il hobz lil min jaf jieklu.
