Government knew Air Malta was declining, and it did nothing - Albert Mizzi
Air Malta's founding chairman Albert Mizzi says airline needs proactive approach to marketing and not just cost-cutting.
The first chairman of Air Malta has said the national airline needs a general overhaul and a greater effort in exploiting new markets, over and above the cost-cutting that is to take place.
Contacted by MaltaToday on the first draft restructuring plan leaked to the press, entrepreneur Albert Mizzi said that much more was needed to bring the airline back on its feet. “Cost cutting by itself is not enough. It is only the start. Cost cutting is only a contributor in a much more far-reaching restructuring process.”
He said that Air Malta would need to undertake a complete re-examination of the company’s systems, such as those that govern ticket pricing, its internal structures, its existing expenses, and all procurement contracts.
Mizzi was Air Malta chairman for 19 years, and helped found the company in 1973, along with other state companies like Sea Malta, Middle Sea Insurance, and Mediterranean Oilfield Services.
“It won’t be an easy operation, but given the current situation, there is no alternative,” he said. “If government wants to save the airline, they have to go the whole hog.”
Mizzi was categorical about the way forward: “It means that it will have to be a drastic top-to-bottom reform.”
Saying that he hasn’t been privy to the contents of the restructuring plan aside from media reports, he said that “they [Air Malta] will have to be lucky if they want to turn a profit by 2014.”
He pointed to the rapidly changing and unpredictable competitive nature of the aviation industry and said that it was hard to predict what the competition will develop next. “You never know what other people are thinking,” he said, adding that the airline will certainly need to periodically re-evaluate its plan along the way.
Mizzi also said that reform and cost-cutting is all the more necessary among the company’s higher echelons. “Those workers in difficult circumstances need to see and understand that the airline is cutting away those benefits enjoyed by the airline management.”
He welcomed Air Malta’s announcement that it would be freezing complementary flights previously handed out the Prime Minister and the President of the Republic. “That is good for workers to see and know.”
He also urged the airline’s management to look towards opportunities it can develop and generate additional revenue through to support cost-cutting initiatives. “If they do not develop opportunities that lie before them, they will fail.”
Mizzi also noted that a proactive approach to marketing has been absent in recent years. “In these last years, Air Malta was simply coasting along as if without a rudder. The government knew it was declining and yet it did nothing. It should have acted before. Everyone knew. Now there is no other way forward.”
MIzzi also underlined the importance of Air Malta’s survival. “It would be a godsend if the company manages to endure, and the salvation of the workers that are kept on. The airline is crucial for the country.”
But he expressed displeasure at news that Air Malta pilots’ union ALPA was threatening industrial action unless unless the Malta International Airport ramps down the tariff it charges to Air Malta flights. “I would be a disaster,” he said. “Imagine the effect of Air Malta flights being grounded on tourism, businesses, and exports. It is a lifeline of the country, so I hope it was only a threat.”
He conceded that the pilots’ association is fighting for its survival and for the future of the air line. “I don’t blame them, but at the same time one needs to be careful and not treat the country’s wellbeing as collateral damage.... such a strike would have enormous consequences that ALPA might not be aware of.”