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9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 5.10.2023 T he decision to fold Air Malta and set up a new national airline was nec- essary, even though bold restructur- ing was undertaken over the past two years. Air Malta was too broken to be fixed, especially after the two restructuring exercises carried out in 2004 and 2010 failed to bring the airline on its feet. The figures presented by Finance Minister Clyde Caruana when unveil- ing the future plans agreed with the Eu- ropean Commission show the extent of Air Malta's current malaise. In 2010, the airline employed nearly 1,400 people. In the 2019/2020 period, before the pandemic struck, on average, every flight lost €4,075 the moment the aircraft took off the ground. With a seat load factor of 74%, passenger revenue per flight stood at an average of €24,534. Employee costs per flight stood at a staggering €5,786. The business plan for the new air- line is premised on a seat load factor of 87.8% thus ensuring passenger rev- enue per flight will reach an average of €27,844. With wage costs cut to €3,186 per flight, the new airline will be ex- pected to make a profit of €2,866 every time an aircraft takes off. Today, following two years of cost-cut- ting and restructuring, the airline em- ploys just under 400 people and the new airline is expected to stick to a headcount of 375. It is these numbers that forced the change that many a minister in the past postponed. Caruana must be com- mended for the bold stand he has taken. Air Malta has been a drag on public cof- fers for years and although the change to a new airline will come with its own cost – €90 million to buy out lucrative early retirement clauses for pilots and cabin crew; €350 million as capital in- vestment in the new airline – the prom- ise of a fresh start will hopefully see a national carrier that makes a profit. It was important for Malta that gov- ernment convinced Brussels that an is- land country on the periphery of the EU needs to have a national airline. This is not just a question of nostalgia but im- portant for the island's economy. But also, having a national airline, is a question of preserving the Maltese peo- ple's right to enjoy freedom of move- ment enshrined in EU treaties. Given there are no road or train links with the mainland, air and sea travel remain the only two modes of transport in and out of the island. Leaving air travel completely in the hands of private companies could result in disruption to tourism and the econ- omy if they decide the Malta route has to be sacrificed. It was also important to convince Brussels that the new airline should operate with eight aircraft. Fewer air- craft would have created bottlenecks and forced the airline to cut down on more routes that would in turn shackle growth potential. It is also crucial that the new airline operates on routes that are profitable. The 17 routes being proposed link Mal- ta to major airports across Europe, in- cluding the UK, France, Italy, Spain and Germany, ensuring access to key cities. More important, the new airline will once again acquire as part of its assets the lucrative airport slots at London Heathrow and London Gatwick. The financials presented by Caruana for the new airline look promising and the minister has also made it clear that work contracts offered to employees will be in line with market levels for comparable airlines. The excesses of the past will be ditched. What is important now is that the promises being made on keeping politi- cal interference at bay are kept. Air Malta has suffered for too long at the hands of politicians who considered it their employment agency. All admin- istrations since the airline's inception in 1973 used the airline as a glorified jobs agency to placate constituents by pro- viding them a job. This burdened the airline with unnecessary costs, which came biting back when market condi- tions changed and the airline started losing money. It is important that Caruana keeps his word and shields the new airline from political pressure. Malta cannot afford a second airline going down Air Malta's way. Air Malta: A fresh start n August 2023, the seasonally adjusted volume of retail trade decreased by 1.2% in the euro area and by 0.9% in the EU, compared with July 2023, according to estimates from Eurostat, the statistical office of the European Union. In July 2023, the retail trade volume decreased by 0.1% both in the euro area and in the EU. In August 2023 compared with August 2022, the calendar adjusted retail sales index decreased by 2.1% in the euro area and by 2.0% in the EU. In the euro area in August 2023, compared with July 2023, the volume of retail trade decreased by 3.0% for automotive fuels, by 1.2% for food, drinks and tobacco and by 0.9% for non-food products. In the EU, the volume of retail trade decreased by 2.4% for automotive fuels, by 0.9% for food, drinks and tobacco and by 0.6% for non-food products. Retail Price Volume DID U KNOW?

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