There seemed to be a light at the end of the tunnel for Air Malta just a few months ago. Operational reforms spearheaded by the former Minister of Tourism Konrad Mizzi, seemed to bring about sustainable financial results which would make Air Malta commercially viable. For the financial year ending 31st March 2018, Air Malta had reported operating profits of 1.2 million Euro.
Recent news reports however, indicate that Air Malta made a thirty million loss. Reduced travel to Mediterranean destinations seems to be one of the main reasons for this dip in financial results.
The company, with all its problems no longer finds itself under the remit of Konrad Mizzi, but now has been passed to Silvio Schembri, who is the new minister for the economy.
Last year, the Government promoted its turnaround for Air Malta, where it registered a profit. Many had argued that this was achieved via creative accounting, where thanks to this, the Government could inject more money in the airline.
With that said, Air Malta can no longer take money from the Government. One way in which Air Malta managed to leverage its finances to a more positive position last year, was to sell its landing rights in Heathrow and Gatwick to a company owned by the Maltese Government. These spaces were then leased back to the airline. The sales of these slots gave Air Malta a very much needed cash boost.
Considering the expected bleak financial results, did Konrad Mizzi really play a pivotal role in Air Malta? Was his input, which seemed to indicate that it steered the company back on the route of sustainable profitability, just a PR ploy? What was exactly the role he played in the company? What is the tangible value, if any?
In light of these recent statements and news reports, Air Malta came out with its own reaction which must also be noted. The airline emphasises that the figures quoted are not based on audited statements and can therefore contain elements of speculation.
The airline also stated that while it indeed endorses the right for the media to communicate, future opinions should be based on the audited statements, which will reflect a more accurate picture of the company’s standing. The statement concluded against reducing Air Malta to a political ball which would negatively impact the national interest.
Do you see a future for Air Malta? Let us know in the comments section below.