Air Malta: the reform that never took off

Editorial | This week’s measures were announced on the back of a cold, clinical, economic analysis of the state of Air Malta. Will it be any different this time round, however?

All throughout the last seven years, there has been a distinct sensation of déjà vu when it comes to announcements and plans concerning the national airline.   

We have been repeatedly told that Air Malta would be facing millions in losses: despite the sales of numerous assets; creative accounting with cash generation from government on the sale of landing rights and brand names; the hiving of airline slots and workforces to other companies, and attempts to curb the high salaries of airline pilots.      

‘Turning the airline around’ had been the main objective behind the government’s five-year €230 million state aid of 2012. Yet it is hard to find any desired effect from the millions poured since then into Air Malta, which has never been able to raise more revenue than its expenditure: due to fluctuations in the price of oil, its historic bloating with excess workforce brought on by political interference, and more recently, the grounding of airlines due to the COVID pandemic.    

Truth be told, Air Malta has fared no better under Labour than under previous Nationalist administrations, when its bloated model was disrupted by low-cost giants like Ryanair: which, to boot, had its “underserved” routes to far-flung European cities subsidised by national funds.     

Such was the irony of EU policy: no state aid for legacy airlines and national assets, but subsidies for private companies connecting far-flung European provinces.      

Clearly, finance minister Clyde Caruana has recognised that the dilly-dallying on Air Malta, which once again will be resorting to some form of state aid under European Commission rules, has come to a head.    

But this realisation has come rather late in the day. In 2015, one of the airline’s chairpersons – Marisa Micallef had said it was amply clear that: “the realities of the industry are such that the airline’s profit margins will always remain wafer-thin unless we rethink our business model to truly ensure viability.”    

We have been hearing the same complaints for at least 20 years: what has stopped successive governments from taking the bull by the horns, and effecting the necessary structural changes to ensure future viability?   

Micallef in 2015 appeared to hint where the main stumbling block lies.   

“If we are to make this work – and I am confident we will – we need everyone’s support. In some cases, this means holding back. That is my message to politicians, both Government and Opposition.”    

Her warning that politicians should ‘hold back’ was interpreted by many to mean that governments should stop treating the national airline as an extension of their own departments. Even former prime minister Joseph Muscat refused to take the necessary steps to trim down the airline, at one time toying with a privatisation route with a foreign airline rather than paring down the salary bill of the company.    

Caruana’s announcement on Air Malta has long been coming; indeed, his first pronouncements as finance minister in 2020 pointed towards crunch-time for the national airline.   

This week’s measures were announced on the back of a cold, clinical, economic analysis of the state of Air Malta. Will it be any different this time round, however? Or are we going to sacrifice the national airline’s future, once again, just to satisfy our favourite game of political bickering?    

Thake’s resignation: an issue of credibility.      

There can be no doubt that Nationalist MP David Thake ‘did the right thing’, by resigning his parliamentary seat after revelations that companies he owns had failed to pay VAT – or even file their accounts – for years.    

He was also quite right in declaring his reasons for resigning: i.e., to spare any further damage to the credibility of the Nationalist Party.    

It would have been wiser, however, for David Thake to simply stop there. Certainly, there was no call for the outgoing MP to also vent his bitterness at the media, for (justly) exposing his own tax compliance situation.   

Still less should he have filed libel charges against the press that did precisely what the Nationalist Party-owned media had been doing to Labour targets for decades... and what Thake himself used to do, for so long, in his former life as a PN radio jock.   

It is, indeed, deeply ironic that the same party that is proposing the constitutional protection of journalists, now has an MP resigning over his alleged ‘loss of credibility’... whilst also complaining about the ‘weaponising of the press’!    

This only illustrates the sheer double standards at play, within our political system. For when press leaks damage the Labour government, they are deemed ‘worthy of protection’ – but if a story damages an Opposition MP, it is automatically deemed to be a ‘leak by the State’...   

It is certainly true that Thake’s situation, as a tax defaulter, might pale into insignificance when compared with the egregious (and non-investigated/non-prosecuted) Panama Papers scandal; and one could also commend Thake for laying down a precedent, whereby “tax defaulters cannot be MPs”. But such resignations should be borne with integrity, and not bitterness towards journalists.    

That, too, is an issue of credibility.