Editorial | Bracing ourselves for a leaner, smaller Air Malta

Air Malta has always been a strategic cog in Malta’s economic development.

Being an island that depends on imports and exports to survive, it was a judicious decision back in the 1970s to establish a national carrier that provided stable links to the outside world.

Air Malta helped the tourism industry boom. It was also used in a strategic way to open new markets for tourism and travel, which may have made sense for some industries but not for the airline’s bottom line.

There were also commercial decisions that backfired, leaving the airline with losses that were never recouped.

But what was possible then through the use of taxpayer money to subsidise loss-making routes, became harder to sustain when Malta joined the EU.

The prohibition of State-aid unless mandated by the EU, meant that Air Malta had to function fully as a commercial enterprise. It took two rescue packages – one just before Malta joined the EU – and another in 2010 to address the big financial problems Air Malta had.

Over the past few years, government’s plans for the airline oscillated between downscaling and the involvement of a strategic partner, to upscaling the airline and opening new routes with dreams to tap markets as far and wide as India and New York.

All of that has now been blown away by the coronavirus pandemic that has led to the wholesale disruption of travel.

Air Malta, like all other airlines, has been brought to its knees. The airline already entered this period with a reported €30 million loss from last year’s operations and the resultant crisis caused by Covid-19 has been its death knell.

The intransigence of pilots and cabin crew to accept a reduction in wages as part of the airline’s strategy to try and contain costs at a time when income has been reduced to zero, has not helped.

The mass redundancies announced by the airline over the past 24 hours are a strong response to the unions’ inability to compromise at a time of crisis.

Whether these redundancies will be enough to help the airline survive the crisis still has to be seen but the company evidently had no other choice.

How quick the crisis ends does not only depend on Malta’s decisions. Air Malta will not be able to fly unless foreign airports are open as well, and even then, it will greatly depend on people’s appetite and financial ability to fly.

Within the circumstances, we have to brace ourselves for a national carrier that will operate with a handful of aircraft, fewer routes and a drastically downsized workforce.

Air Malta will have to start small, growing by time as the situation develops.

But then would be the time for politicians to stop using the airline to give blue-eyed boys and girls cushy jobs. This has been Air Malta’s bane since inception.

The current crisis should be used as an opportunity to start afresh with an airline that runs a lean operation with work conditions that respect employees but which also make sense in an evolved airline industry.

Restarting in this way will enable Air Malta to continue serving the island for the foreseeable future.