Cypriot airline fiasco sends shivers down Chamber’s spine

The Chamber of Commerce has reiterated its call for a concerted effort from all quarters to ensure the survival of our national airline, after news of the European Commission’s decision to have Cyprus Airways refund €65 million in state aid, after it failed to achieve financial viability

“We call for a renewed resolve from all parties to ensure credibility in Air Malta’s restructuring process and the utilization of state aid funds granted by the Commission on a ‘one time, last time’ basis,” the Chamber said.

The national airline has benefited from a €230 million restructuring state aid to achieve profitability, with its latest cost-cutting exercise to rationalise its food offering with a baguette having attracted much public attention.

“We commend the decisions taken by the Airline’s management to slash operating costs and ensure viability. Futile quibbles about insignificant matters along the way must be avoided at all costs because these can cost the economy, the airline and all its employees dearly,” the Chamber said.

“We call on the stakeholders to abandon outdated policies and rigidities and to think strategically towards rendering the company financially sustainable in the long term.”

The Chamber said that the Cypriot experience showed that the EC means business and will have no mercy on state-aided companies that do not comply with state aid rules.

“Air Malta has played a pivotal role in Malta’s economic and social development. The airline’s international route network, built by sustained investment over the years, is vital for the country’s economic development. Beyond tourism, the airline offers a lifeline to the vibrant manufacturing industry which accounts for a significant contribution to GDP, exports, investment and private sector employment,” the Chamber said.

“Specifically for the manufacturing industry, reliable and timely supply of components and raw materials is essential to modern just-in-time manufacturing and integrated supply-chains. Equally important to the manufacturing industry are the down-stream oriented activities where the closing and opening of routes based purely on passenger numbers can make or break a manufacturing company in Malta, by shutting off timely and cost-effective access to markets.”

The Chamber no feasible alternative air freight existed for the pharmaceuticals, microelectronics, electrical components and printed security documentation industries.

“Air Malta provides pivotal role to emerging sectors of the economy such as real-estate, yachting, education, logistics and remote gaming. The airline’s route network renders possible the constant attraction of foreign direct investment, particularly in those areas where the investor needs to repatriate workers and family.”