The inauguration ceremony of the first Airbus was overshadowed by strong comments made by Air Malta's chairman Lawrence Zammit, who insisted that the company's present situation was no longer tenable.

If the company failed to change the working practices which were valid 20 years ago, the present dismal situation would just get worse, Mr Zammit insisted.

"Inertia in the company's operations and organisation are a thing of the past. Accepting the present situation is the first step in a long and arduous road to get back on our feet," he said.

"There may be those who feel these are harsh words for a day of celebration. But, I assure you, we are living in a world where being competitive is crucial, and these words have been carefully chosen."

Mr Zammit was yesterday speaking at Air Malta's engineering hangar at the official inauguration of the first Airbus A320 (9H-AEF) christened Valletta, which was blessed by Archbishop Joseph Mercieca.

The ceremony was attended by Deputy Prime Minister Lawrence Gonzi, who stood in for Prime Minister Eddie Fenech Adami, and Investments Minister Austin Gatt.

Dr Gonzi, who read a speech prepared by Dr Fenech Adami, and Dr Gatt also had strong comments to make on Air Malta's present situation.

"The past three years were the first years that Air Malta registered a loss. Malta's need to have a national airline cannot justify the company's unsustainable situation," Dr Gonzi said.

Air Malta's losses for the last financial year reached about Lm16 million.

The terrorist attacks of September 11 kick-started the losses, but the company's internal problems have to be addressed because they are threatening its competitivity, he said.

"There is in my opinion unjustified criticism that since the Nationalists were in power before, we shouldn't have to look around to see what needs to be changed," he said.

"We never pretended that what we did since 1987 was perfect or that the situation would not have to be reviewed to face the future.

"When we were re-elected in April we entered office with the energy of a new government that looked with a critical eye at the country's realities.

"Our aspirations are no longer those of 1973, 1987 or 1998. Air Malta, like the rest of the country has to change with the times."

Meanwhile, Dr Gatt said Air Malta had to focus on its commercial goals and reduce its dependence on travel operators to become a European airline which exploited the new possibilities.

"In the light of such harsh competition we have to be able to curb the internal operating costs and concentrate on the company's core business," he said.

Dr Gatt also took the opportunity to mention that the decision to replace Air Malta's fleet was taken by the previous board chaired by Louis Grech.

"This was a wise move which provides Air Malta with a modern fleet at a reasonable price and advantageous maintenance costs," he said.

The new 168-seater is one of five Airbus A320 and seven other new A319 aircraft which Air Malta will acquire over the next four-and-a-half years on lease from the International Lease Finance Corporation.

The fleet replacement project will be completed by March 31, 2008 when Air Malta will receive the 12th aircraft from the corporation.

The second new aircraft, a 141-seater Airbus A319 (9H-AEG), will join the fleet on February 4 - this will be the first time Air Malta will be operating a Maltese-registered Airbus A319 in its fleet.

The fleet rationalisation programme was only the first step in a broader co-operation between Air Malta, Malta and Airbus.

Air Malta was keen to expand its training capabilities to other Airbus customers. Further collaboration on training could potentially see Air Malta undertaking some ground school activities on behalf of Airbus since it has both the experience and the latest training equipment.

Airbus is also organising one of its air transport seminars in Malta next month, which will be attended by about 30 airline executives and professionals from the Mediterranean area.

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