Air Malta presents its Annual Report and Consolidated Financial Statements for Year Ended March
Air Malta presented its Annual Report and Consolidated Financial Statements for year ended March on Saturday during which the operations of the airline company reported a loss of €13.1m.
During the year under review the airline experienced a decrease of €28.3m in revenue when total revenue amounted to €192.2m compared to €220.5m a year before, mainly driven by a capacity reduction of 20%.
The airline’s operational costs decreased by €20.6m.
The decrease in operating costs was driven by lower aircraft leases, fuel costs and related maintenance expenses, efficiency gains and savings on a number of contracts and administration expenses.
However, the former fuel hedging contracts were in place for much longer than those of competitors. The airline was not in a position to benefit from lower fuel prices in the reported financial year commented Air Malta’s CFO, Klaus Gossler during a press briefing announcing the results.
Over the last few months, the airline has been focusing on a revenue growth strategy including a review of its route network; a strategy which the airline embarked upon soon after the appointment of the new Board chaired by Dr Charles Mangion in July this year.
The Board approved a new three-year Business Plan starting as of April which is projected to see break-even by March 2018.
Speaking at the briefing Dr Mangion said that Air Malta must look forward and make a success out of its new growth strategy. He revealed that bookings for the current Financial Year 2017/18 are very healthy with 141,000 additional passengers compared to last year.
“The introduction of seven new routes next summer and a confirmed additional aircraft is expected to continue pushing further growth in passengers and revenue. My Board believes that Air Malta has a future only if it grows. That’s why one of our first decisions was to reintroduce a number of new routes, including Frankfurt and actively continue discussions with the unions, aiming to close all collective agreements by end of year,” he said.
Acting CEO Joseph Galea spoke about the airline’s current phase “…driven by a period of innovation, development and growth”. He explained that for many years the airline has shied away from investments in IT as it was passing through a difficult time.
“New technologies, platforms and solutions are being currently discussed and explored which once engaged should put the airline not only on the forefront of technology, but also as one of the topmost innovators in the industry,” he said.
“There is a strong drive towards an operational culture shift orienting towards a more agile environment, giving more flexibility and highly focused on providing added value. This is a three-year business plan that will see the airline moving to possibly taking off from a break-even position in the current year of 2017/18; this could possibly be the first time that the airline will not report a negative financial result in a long number of years,” he added.
Minister for Tourism Konrad Mizzi noted that together with stakeholders we will ensure Air Malta will be a success story. He emphasised the importance of publishing the accounts which were pending. He explained that the current year is a year of transition which focuses on revenue growth and improved yields. This will enable the company to register breakeven after many years.
As of next year he augured that the airline will operate with a new Collective Agreement, which is fair and provide the company with flexibility. The minister noted that currently a study is underway to examine the increase of further aircraft next year in addition to the one which will come into service in April.
Speaking at the briefing, Paul Sies, Air Malta’s chief Commercial officer added: “The past few months exceeded our budget expectations. Preliminary estimates show that we are forecasting 25% more bookings than budgeted. Our revamped product offer, that includes our hand luggage only fare, Go Light, was very well received and 148,000 Go Light tickets were sold since September. Since then we have seen internet sessions going up by 41%, sales of seat reservations increase by 61% and ancillary baggage sales increase by 163%.”
He added that the unbundling of the product was part and parcel of the new strategy which sees the airline changing from a traditional to a hybrid business model. “This model will also entail the imminent introduction of new catering in economy class, a new business class catering service and a new frequent flyer programme by next year,” he revealed.