Issue link: https://maltatoday.uberflip.com/i/773562
maltatoday, SUNDAY, 15 JANUARY 2017 15 We have to do that: the manage- ment, the board of directors, the government, the employees, in cooperation to find the best way forward..." Speaking of the 'shape it should be in'... what is that shape, any- way? Zammit Lewis earlier said the airline falls between two stools. What model does he think should be adopted to ensure (at least) sur- vival? "Before answering, I must say that it is a pity we only ever dis- cuss the negative things about Air Malta. Why do we never talk about the airline's security record, for instance? Or the service it of- fers? People tell me they continue to fly Air Malta because of the quality. The problem, however, is the flight fares: how much you pay for a ticket. Because the cost- base is so high, Air Malta cannot compete with other airlines in that department. The answer has to be a reduction in the cost struc- ture... something that no one has ever wanted to address. I see two fundamental problems: one, that a number of flawed decisions were taken in the past – and I believe there are former chairpersons and ministers who should be held re- sponsible. Two, some of the right decisions were never taken..." To my surprise, his first example of such a decision concerned the reduction of the in-flight meal to a bread-roll. "On the Opposition newspapers, they measured the bread-roll, crit- icised the quality, and so on. But I know for a fact that the preced- ing administration had spent two years trying to solve that issue with the caterers, without success. How long have I been a minister? Within months, we solved it – not just me, but the whole team, the board etc – and saved the com- pany €4 million in one year. Now: is that bread-roll of the finest qual- ity? I think the question should re- ally be: should we be talking about meals at all, on an hour-and-a- half flight? It is debatable. But ei- ther we are going to talk seriously about what decisions need to be taken to save Air Malta... or else criticise each and every decision we take on a political level." With all due respect, most peo- ple would look at the bread-roll issue as only a minor detail. We were talking about the structure and business model of Air Malta as a whole: its work practices, its cur- rent staff complement, its strategic direction as an aviation company... what model is the government pursuing? "Fair enough, I got sidetracked. To answer your question: Air Malta can never be a low-cost airline; nor do we aspire to turn it into one. But there is a model for a quality, reliable airline that controls its cost-base. We have trimmed away a lot of the excess fat [xaham]. There was a lot of over-spending that has been elimi- nated. In the IT contract, for in- stance, we saved a million a year. But there are also external factors. Just as I became minister, we lost the Libya route. That route alone gave us a bottom-line profit of €10 million a year. Now: I hope we will not get blamed for what happened in Libya, too. But without the loss of that single route, Air Malta would be making a profit today. If you add those €10 million to the minus €4.2 million with which we closed the year... we would have made just under €6 million." Libya was not the only loss, he adds. "We lost Russia, also for po- litical reasons. Then there's the fuel problem. We buy fuel by the US dollar, and the dollar is once again rising in value..." All this seems to confirm that a strategic partner is indeed neces- sary: but that only brings us back to the present scenario. Now that the deal has fallen through, what's the next step? Is there any truth to the rumour, for instance, that talks are already under way with either Turkish Airways, Air China or both? Zammit Lewis refuses to go into specifics, but confirms that talks are underway to at least initiate negotiations with other strategic partners. "What I can say is this: we are pursuing other avenues for a partnership, but we will not sell ourselves cheap. We want a part- nership that is beneficial to Air Malta. And I might add that today, though the failure of the deal may be interpreted as a failure for the government, we have proved a lot of people wrong. We disproved the suggestion, made in many newspapers, that the idea was all along to sell Air Malta to Alitalia on the cheap. Everyone can now see this is not true at all..." Perhaps, but we can also see how difficult securing such a deal may prove; and Zammit Lewis himself has repeatedly stressed that the airline needs a strategic partner- ship for its survival. Does the col- lapse of this deal make the possi- bility of Air Malta going bankrupt more realistic? And if so, what other options are available? "Not at all... in the sense that, we have never excluded other op- tions. We do not exclude the pos- sibility of reaching agreements with other airlines: nor even to turn to local investment, as some have suggested. But we were al- ways cautious, because we believe that local investment, on its own, will not address all problems. But we have also worked on a stand- alone option. We don't exclude that, either." Can Air Malta really stand alone, though? "Yes, if the necessary reforms are implemented. But this has to be qualified. If we want the national airline to grow, and not just sur- vive... then it must be part of a stra- tegic alliance that would give us a larger network, better IT systems, more advantages in procurement. So the way I see it is: we need to work on a stand-alone option, be- cause nobody else can clean up the sins of the past for us. It's some- thing we must do ourselves. But with the right deal – and the deal has to be the right one – only a strategic partnership can give us growth." Interview Having invested so much in a 'strategic partnership' with Alitalia, the collapse of this deal comes as a blow to Air Malta's future prospects. But tourism minister EDWARD ZAMMIT LEWIS is confident that Air Malta can still be saved and made profitable