Air Malta has finally disposed of its last four Avroliner RJ aircraft, plugging a financial hole often blamed for bringing the national airline to its knees.
Over the past month, the airline has sold a British Aerospace RJ85 and an RJ70 to an Italian company, another RJ70 to a Swedish airline, and the remaining RJ70 to a Bulgarian company.
Two of the RJ70s just sold will be converted for VIP use, Air Malta announced yesterday. The other three aircraft had been sold earlier to Middle Eastern clients.
The RJs had been purchased between late 1994 and early 1996 to be utilised either in the Air Malta fleet or by its Italian associated company, AzzurraAir which had, at one point, also taken over the Air Malta aircraft.
After AzzurraAir folded up, the aircraft were grounded for some time, but were mostly leased to regional airlines in Europe.
The RJ aircraft had been sold to a consortium of four banks in September 2002 and then leased back by Air Malta, but the national airline had repurchased option rights.
Rather than continuing to lease the aircraft until their expiry dates, stretching to May 2008, Air Malta decided to repurchase the aircraft and sell them.
Commenting on the sale of the latest batch of aircraft, Air Malta chairman Lawrence Zammit said: "This is excellent news for us. We are now in a better position to continue in our efforts and concentrate on revenue-enhancement projects that are aimed to return Air Malta into profitability."
Despite the introduction of low-cost airlines, Air Malta managed to halve its losses to Lm3.1 million, while turnover was up from Lm99 million to nearly Lm112 million.
The Labour Party has maintained that the airline had been brought to its knees after the purchase of the RJ70 planes, especially since the decision to buy such aircraft followed a Cabinet decision that actually ran against Air Malta's own advice.
On the other hand, while Investments Minister Austin Gatt admitted that the purchase of the RJs was a commercial mistake, it had nothing to do with the national carrier's ills.
In 2004, the ministry stopped all investment in AzzuraAir and decided to repossess all its Avro airliners, leasing them out or putting them on sale.
In a statement, Dr Gatt said the sale signalled an important step towards putting the airline on a sound basis.
The decision to wash its hands of the RJs was the result of government's strategy to rid Air Malta of its "unsustainable" activities, which do not fall directly in its direct operations.
The ministry said it believes this positive news means the airline may start focusing on a serious restructuring process and incentivise all those involved in finalising a collective agreement.