‘Next year’ never comes

Nothing breeds confidence in future success quite like a string of successive, identical failures in the past, now does it? For let’s face it: this is hardly the first time Air Malta’s restructuring plan has deviated from its annual targets

Is it just me, or did something strange just happen at the offices of our embattled national airline, Air Malta?

Consider the following announcements, both of which were made over the past five days. On Thursday, 12 March, we were told that Air Malta is on course to make a 15 million euro loss for this year. According to Tourism Minister Edward Zammit Lewis, “that would mean that the target agreed with the EU Commission to make the company viable would have to be met in the following 12-month period, by March of next year.”

He went on to add: “Failure to meet this deadline would mean that the government would no longer be allowed to give the airline state aid to cover for its losses.”

For you see, the EU restructuring plan we’re talking about involves pumping around 130 million euros of public money into the airline: without which, it is safe to say that Air Malta will no longer exist as an airline under that name. 

So effectively, if we don’t turn Air Malta around from a loss- to a profit-making entity in the next 12 months, starting from NOW… we can kiss the national carrier’s ass goodbye forever. 

But not to worry, folks! Edward Zammit Lewis has a cunning plan. He must do, because he is also “confident the airline [will] achieve its targets.”

Ah yes, of course. Nothing breeds confidence in future success quite like a string of successive, identical failures in the past, now does it? For let’s face it: this is hardly the first time Air Malta’s restructuring plan has deviated from its annual targets. According to the airline’s own chairman, Maria Micallef, the EU restructuring plan has only ever been on target once: and that was in 2012, when it was first imposed on Air Malta by the European Commission. 

That year, Air Malta slashed its losses by half. But the year after, a projected loss of €15 million somehow doubled to €30 million.  And now, at the end of the 2014 fiscal year – which was supposed to be the airline’s breakeven point – losses have once again exceeded expectation.

That was Thursday. But then, last Monday – four days later – we got to know that 1,194 Maltese citizens living abroad had availed themselves of a special discounted fare offered by the national airline, and will fly to Malta for only 70 euros to vote in the spring hunting referendum and/or local council elections on April 11.

Hmm. OK, let’s try and work this out. Just last week, we were told that Air Malta was struggling to restructure itself in line with European Union directives. It had to postpone (for the second consecutive time) a Commission-imposed deadline for economic turnaround. Now it’s a question of do-or-die. A third consecutive failure will no doubt be the last. 

And bear in mind that both Nationalist and Labour governments have consistently argued that this is an eventuality we must resist at all costs, because our national airline serves a ‘national strategic purpose’ that no private commercial airline can ever replace.  

Oh, and one other thing: just last January, it was announced that Air Malta had embarked on a cost-cutting exercise precisely to avert this sort of catastrophe. Out went the previous inflight hot meal service, and in came a Ryanair-style meal of bread and water instead. 

Yet by Monday, it would seem Air Malta’s fortunes had turned around to such an extent that it could suddenly afford to slash its prices by more than half on inbound flights. Remarkable that they could do this, when we’d only just been told they could no longer afford to serve up a bit of luncheon meat garnished with baked beans and maybe a hardboiled egg on the side. Oh yeah, and a muffin. Let’s not forget the Air Malta muffins… 

In any case: Air Malta was so broke – altogether now: ‘how broke was Air Malta?’ – that they even had to cut back on their inflight muffin service to save money. Yet suddenly, they could afford to voluntarily forego half their profits on Malta routes. What happened? Was the airline bought up by a Russian oligarch while we weren’t looking?

OK, I know what you’re probably thinking. This particular self-inflicted loss probably does not amount to very much, compared to the savings made in other areas. Would all those 1,194 people have booked a flight at all without the discounted rate? Unlikely… so the actual loss may well turn out to be negligible in the end. 

Ah, but then you have to factor in all the other special election discounts Air Malta has so generously offered over the years. In past elections, the fare for election flights was only 35 euros. 35 euros! The subsequent taxi to your hometown would probably cost more. And a recent parliamentary question also revealed that “during the 2013 general elections, 4,891 Maltese took up the offer. The 2009 MEP elections had attracted 1,377 nationals to vote whereas the 2008 general elections saw 3,057 Maltese making use of the scheme.”

Well, what do you know? 2013: the same year Air Malta ‘unexpectedly’ lost 15 million. And sure, that figure cannot be accounted for by the election discount alone. Even so, the numbers are no longer quite so easy to dismiss. 

We are now talking about a (roughly) 75% discount, enjoyed by around 9,000 people over three years. Potential revenue losses for Air Malta suddenly run into hundreds of thousands of euros. And oh look: by a curious coincidence, the aforementioned restructuring deadline also had to be postponed in 2013… after almost 5,000 people had flown Air Malta for next to nothing. 

Since then, there were also European elections in June 2014… so of course the financial targets for 2014 likewise got re-routed. In fact, it seems that every single time an election comes trundling along, all the national airline’s finely-laid financial projections suddenly encounter a spot of turbulence. Yet strangely, no one seems to see any correlation with Air Malta’s financial decline, and the fact that the airline also doubles up as a special electoral campaign tool for the benefit of Malta’s political parties.

On the contrary: the reaction from the people supposedly responsible for this airline is always the same: “Don’t worry, we’ll get it right next year. Yes, yes, I know we said the same thing last year and the year before. And it’s true that we are consciously and deliberately making exactly the same mistake that had skewed all those previous projections, too. But this time it will be different. Trust me, I’m confident…”

Well… as long as Mr Zammit Lewis is confident, who are the rest of us to argue? It is after all our money, and not his, that actually pays for those flights, you know…. 

But the real oddity is another. Somehow, we have all just accepted a situation whereby the national airline is utilised to boost attendance in general (and local) elections… even at a time when the same airline is under EU orders to stop wasting taxpayer’s money, and to start acting like a competitive player in the market instead of a glorified government employment agency.

Why do we all just accept this? Oh, plenty of reasons spring to mind. For one thing, people are unlikely to complain when a blatant abuse of their own taxpayer’s money translates into cheap flights for themselves. But the official justification, such that it is, is that people have a sacrosanct right to participate in elections… and that Air Malta’s ‘national strategic purpose’ also includes facilitating participation in the democratic process, for the greater good of all mankind. 

Small problem with that argument: if people have a sacrosanct right to participate in the democratic process, and the government feels it has a democratic duty to assist overseas citizens to vote… well, the same objective could very easily be achieved (and at no cost to Air Malta) simply by allowing them to vote in embassies abroad; or, even more pragmatically, to just send in their votes by post. 

The advantage for voters would be far greater than a discount on an Air Malta flight. They would get to fulfil their democratic prerogative for the price of a postage stamp, or a bus-ride to the city centre: whichever is cheaper.

Clearly, however, it would not work out quite so well for the political establishment. This might explain why both Labour and PN have in their day resisted implementing such a simple reform to the electoral process. Evidently, they prefer to squander hundreds of thousands of taxpayer euros, on a scheme that has the unintentional effect of also crippling Air Malta… rendering any hope of a future turnaround impossible. 

Why is that, I wonder? Why does it pay the political parties more to have voters flown over here at the country’s expense?

I think the answer goes back to that bit about ‘national strategic importance’. As with most other areas of life, Maltese political parties have by and large tended to view the democratic process, not as an issue of civic rights, but as a life-support machine to which they themselves are attached. 

Both parties invest considerable resources in controlling the machinery of democracy… they keep tabs on voters (how many times did they call you at home last election day?), and they even offer transport to and from the polling stations for people with mobility issues, etc. The fact that our system forces people to vote here in Malta therefore also maximises opportunities for political parties to keep a close eye on the whole process. 

And this, it seems, is the ‘national strategic purpose’ they talk about when they justify exploiting Air Malta for their own political ends. Very strategically important for the political parties themselves, yes. But what about the rest of us? What about Air Malta, which clearly cannot sustain the regular stream of losses this practice has always entailed?  

How much, in brief, are we expected to carry on paying, so that political parties can get to keep their grubby control over every last aspect of this country’s power infrastructure, forever?

Just thought I’d ask, that’s all....

More in Blogs