Air Malta in bid to improve Azzurra Air`s operations

Alitalia, Air Malta and Azzurra Air are to have talks in an attempt to resolve some of Azzura Air`s operational problems, Economic Services Minister Josef Bonnici said yesterday.

Air Malta holds a 49 per cent shareholding in Azzurra Air, which last year contributed substantially to the Maltese national airline`s losses.

Prof. Bonnici was speaking after returning from a high-level meeting in Rome where he met Italian Transport Minister Pietro Lunardi to try and revise Azzurra Air`s agreement with Alitalia.

Discussions will be focusing mainly on Azzurra Air`s code share agreement with Alitalia which entitles the Italian national airline to offload some of its passengers onto Azzurra Air.

"Because of the conditions experienced by the airline industry in general, the Air Malta group is seeking to improve certain operations.

"Part of Azzurra Air`s operations are suffering and it`s time to start tackling them," Prof. Bonnici said.

The minister said that practically all Italian airlines were losing money. Yet still, Alitalia appreciated the problems encountered with Azzurra Air and was willing to discuss the situation further with Air Malta.

Prof. Bonnici said he could not divulge any more information since the matter was a commercial one.

"What I can say is that there is goodwill from the Italian government to proceed with discussions," he said.

Prof. Bonnici declined to comment over whether Air Malta was contemplating divesting its shares in Azzurra Air.

A statement by the Economic Services Ministry said the two ministers also briefly touched on the need to continue strengthening economic ties between the two countries.

Azzurra Air is a private regional airline founded in December, 1995 with its operational base located at Milan`s Malpensa airport.

Over its past financial year, its performance was subjected to the harsh environment in the international industry and it made an operating loss of Lm6.8 million for the calendar year 2000, in stark contrast to the profit of Lm0.4 million in 1999.

This was reflected in Air Malta group`s Lm3.7 million losses for the year ending March 2001, with the group management pointing fingers at Azzura Air.

In an interview with The Times last December, Air Malta chairman Louis Grech had said that the group was negotiating with Alitalia to revise the Azzurra Air contract.

Aviation sources recently also said that efforts were being made to dispose of the four Avro RJ70 Avroliner regional jets now flying for Azzurra Air.

The four jets had been bought by Air Malta in 1994 and originally also served with its fleet. They were then passed on to the Italy-based regional airline.

Accompanying Prof. Bonnici on the trip to Italy were Mr Grech, MIMCOL chairman Ivan Falzon, and Azzurra Air chief executive Dominic Attard.