Indepth: Airline’s headcount could be reduced further, no long-haul routes or partnerships for now
indepth airlines headcount could be reduced further no long haul routes or partnerships for now - Indepth: Airline’s headcount could be reduced further, no long-haul routes or partnerships for now

While Air Malta’s headcount has already gone down over recent years, the airline could operate with even fewer people, the airline’s new Executive Chairman, David Curmi, said on Indepth.

Curmi, who hails from an insurance and financial services background and headed important entities such as the Chamber of Commerce and Trade Malta, took up his new role at Air Malta at the beginning of this year.

He spoke about the need for the national airline to reduce losses, start making profits and become more efficient.

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The biggest challenge for Air Malta, he said, is to, “without having expectations of great profits,” become sustainable and depend less on its shareholder – the government – or on external help, like the European Commission.

He says the airline cannot have unrealistic expectations and must, over the coming years, focus on nearby markets and core destinations.

It is often said that Air Malta has too many employees on its payroll. Asked if there are plans to reduce the staff complement, Curmi said, “the indications we have is that, although the headcount went down significantly over the past years, the airline can still operate with fewer people and we are seeing how we can reach higher efficiency levels. This is not an easy thing to do but we are trying to see whether certain operations should be retained inhouse or be outsourced, as long as there are benefits for the company.”

Management changes, relationship with pilots

Curmi further elaborated that the biggest three expenses are aircraft operations, payroll and fuel. “These areas are the ones we need to concentrate on the most.”

He also confirmed that there will be changes at the company’s top-level management, as already indicated by the government. “The shareholder has already signaled that the company cannot continue operating with a business-as-usual attitude. There has to be change in the mentality and the culture within the company. I intend to build a strong management team from which the next CEO could emerge.”

Curmi said he has held informal meetings with the airline pilots union – ALPA – and is hopeful that he will have a good relationship with them. “I do not like referring to them as ALPA because they are pilots – they are our colleagues and part of the company. Without them, we can’t fly.”

He continued that he does not intend to be “confrontational” with the pilots.

“I think pilots understand that, in current circumstances, we need to find solutions together.”

State Aid

Last year, the government applied for state aid from the European Commission in view of the losses incurred as a result of the Covid-19 pandemic. The EC has requested additional information.

“We know that the Commission can be quite hard, particularly when it comes to the aviation sector. We will be making a second attempt and provide the EC with more information and Air Malta’s specific case, and I am hopeful that this time round our request will be considered better. Having said that, this is a long and hard exercise which might require a lot of negotiations.”

Curmi said revenue streams have decreased substantially. Expenses have decreased too, but not at the same rate. Passenger numbers had dwindled, and airlines are having to refund tickets, as per EU regulations.

“The airline has already paid millions in refunds which it did not have to pay in previous years. The impact of this on the company was enormous. I hope that the Commission starts to understand the importance that national airlines have in flying in cargo, medicines and mail. If the airline were to shut down, the country would also shut down.”

Regional airline, Brexit

Air Malta still plans on becoming a regional airline, he said. It will concentrate on European countries and will also start flying to Libya when the situation permits.

“We will have to cut certain routes, but we will focus on main airports and short routes, and on having an efficient operation.

Asked on Brexit, Curmi said the UK will always remain a core market, both in terms of passengers and cargo. He is hopeful that the situation will soon settle down and things will become clearer.

No strategic partnerships or long-haul routes … for now

Air Malta had tried to reach a number of strategic partnerships, including with Alitalia. Asked if it still plans on finding a partner, Curmi said those plans have been placed on the backburner for now.

“Before heading in that direction, we must do a lot of internal work and strengthen the company.”

Long-haul routes do not make sense, either, at least for the time being. “We have also shelved that strategy. Introducing such routes requires a lot of investment and the company is not in a position to do that right now.”

A vision for Air Malta

Curmi was asked what his vision for the airline is, and whether the fact that he does not come from an aviation background, like some of his predecessors, is what the airline needs at this juncture.

“I come from a business background, where what you are left with at the end of the day is more important than what you brought in. I have always learned that the top line is vanity and the bottom line is sanity. I am trained to ensure that all that Air Malta does is profitable. We should only do things that are not profitable if it is in the national interest or an emergency. All the different parts of the company have to be profitable or else it won’t work. The focus will be more on the bottom line than on income and passenger numbers.

It is pointless to carry millions of passengers if we are not making an acceptable profit from every passenger. My focus will be on making the airline more efficient, reduce losses and reduce expenses.”

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