Updated - Adds comments by Tourism Minister - Air Malta said today it made a loss of €16 million in the year which ended in March, in line with projections, but it expects losses to be reduced to €4 million in the current financial year.

"Air Malta's results for the first half of the current financial year show that the airline is on track to regaining profitability, with the company projecting a loss of €4 million by March 2016," chairman Maria Micallef said.

She said the airline had suffered from the closure of the Libya route and a drop in the number of passengers from Russia, factors which cost it some €10 million.

The airline was also affected by increased competition and a 'depleted management structure'.

She said the results for the financial year to March 2015 were achieved thanks to, among other things, a renegotiated catering contract which saved the company €4 million. She also said Selmun Palace Hotel had been sold (to the government). This year the company is reducing its aircraft, all leased, from 12 to eight, but it will maintain all routes and capacity through a higher utilisation rate.

Ms Micallef said passenger and revenue figures for July this year were even higher than in July 2013, which had included substantial numbers from Libya.

NEED FOR STRATEGIC PARTNER

Ms Micallef said the Air Malta workforce needs to increase its productivity by 25% in some areas to compete with other airlines.

She also underlined the need for the airline to have a strategic partner.

“No matter how much we address our costs, we shall never be able to negotiate with the same clout of airlines that have fleets of hundreds of aircraft. We will not be able to negotiate the same costs for fuel, for maintenance, for IT systems and for everything else. And in an industry-driven by cost and pricing, this means we shall never be able to compete effectively,” she said.

The press conference was attended by Tourism Minister Edward Zammit Lewis, who said AirMalta was entering its last year of restructuring plan with cautious optimism. 

Dr Zammit Lewis said Air Malta in the first half of the current financial year was €8.7 million better off than this time last year. This was a delicate time but he was sure the airline would eventually achieve its targets. Although not everything was in line, owing to external factors, much had been achieved, and talks would continue to the European Commission. 

On talks with other airlines about a strategic partner, Dr Zammit Lewis said parallel talks were being held with a number of airlines, but the government would retain a majority shareholding and Air Malta 'would remain Air Malta'.