Air Malta forecasts ‘€16 million loss by year end’

Despite gearing up for a break even, Air Malta’s finances are expected to once again experience renewed turbulence and slip back off the EU rescue plan as a €16 million loss is being forecasted for March 2015.

In an interview with the Sunday Times of Malta, Air Malta chairwoman Maria Micallef stated that the airline slipped back on the EU’s five-year restructuring plan, and instead of breaking even, it will close the financial year ending March 2015 with a €16 million loss.

Now in its fourth year, the European Commission’s €230 million restructuring plan for Air Malta was meant to bring Air Malta’s deficit under control.

However, the Air Malta chairwoman - the airline's first - has explained that the airline has fallen short of its forecast, and rather than break even, will post €16 million in losses.

Nevertheless, the forecasted losses could be worse than expected as in September, tourism minister Edward Zammit Lewis neither refused to confirm or deny the forecast of €30 million in losses.

Moreover, Zammit Lewis’s colleague, finance minister Edward Scicluna, had called on the airline to take advantage of the “one-time cash injection.”

Under a €230 million restructuring plan mandated by the European Commission, Air Malta has managed to stabilise and reduce its operating losses for two consecutive years after it had halved its workforce.

But amidst increasing competition and the suspension of the Libya route – one of Air Malta’s most profitable routes – the airline’s revenues are under pressure.

However, notwithstanding the financial turbulence, Air Malta chairwoman Maria Micallef – who is steel reeling from the resignation of former CEO Louis Giordimaina – is “looking forward” to offset the losses and confident that “Air Malta will post profit in 2016.”

Moreover, Micallef has argued that the airline is addressing its losses by revitalising is commercial arm and embarking on new routes to Tunis and Algiers to compensate for the Tripoli route.

The Air Malta chairwoman also explained that the airline aims to “tackle some €30 million worth of service contracts” and that thousands could be saved in the IT sector.