[WATCH] 'Air Malta restructuring is about more than strategic partners' - Zammit Lewis

'Air Malta restructuring plan is about more than just strategic partners' - Edward Zammit Lewis

The Air Malta restructuring plan is about more than just strategic partners but about reaching particular goals and increasing cash flow, said tourism minister Edward Zammit Lewis.

Speaking at the end of a consultative meeting with Malta Hotels and Restaurants Association council members, Zammit Lewis said that the restructuring plan and subsequent changes in the company were necessary, regardless of the presence of strategic partners.

“The restructuring plan was agreed to in the previous administration, however many of the goals are not just a question of increasing cash flow for the company,” he said.

He further explained that the company would continue with its restructuring and cost-cutting plans, just like it had saved some €9 million in 27 months in its agreement with Sky Gourmet among others.

In his comments to Malta Today, Zammit Lewis further denied that Air Malta was certain about its move from the Sky Parks Business Centre in Luqa where it had moved at the end of 2012.

“Air Malta is currently undergoing a number of cost-cutting exercises, which may well include a move to different premises, however no final decision has been taken yet,” Zammit Lewis said, adding that the company was leaving all options open.

He added that the cost-cutting exercises were meant to make the company more commercially viable and reach the objectives of the restructuring plan.

Asked how much a cost cutting exercise of the sort would be worth, Zammit Lewis said that the company was currently carrying out various studies into the cost of office space rentals among other things, but that it was too early to put a figure on such studies.

Zammit Lewis said that Air Malta needed to change its business model, and that a strategic partner was needed to make the company more commercially viable and strategically important. He explained that discussions were ongoing, and quoting ‘commercial sensitivity’, he added that discussions were at too early a stage to reveal the names of the companies or countries in question.

“At this point, it is too early to reveal any information, but once things are more concrete, we will have no problem with revealing such information,” Zammit Lewis said, stressing that since things had not been finalised, it would be premature to reveal anything else.

He added that given the nature of the discussions, it was also premature to give any timelines about the discussions since doing so could “ruin some of the sensitive discussions” currently taking place.

Zammit Lewis explained that the government was doing everything in its power to try and reach the desired objectives despite the unscheduled setbacks the company had faced.

“The situation in Libya lost Air Malta some €900,000 of its income a month,” Zammit Lewis said, explaining that the profits had originally helped to increase the company’s cash flow.

He added that the company was seeking new avenues and routes to fly to, and that the changes that were being enacted to bring the company out of its slump.

“The European commission will ultimately decide whether or not the company will be able to cope without the government’s aid.”

“Some of the changes we are carrying out now should have taken place some time ago but we are determined to make them work now anyway,” he added.

MHRA calls for a drop in VATs to make hotels more competitive 

MHRA calls for drop in VAT to make hotels more competitive

Council Chair Tony Zahra said that the consultation meetings, which were held every six weeks or so, were designed to review the way the industry was going and how it would progress in the future.

He added that the industry had seen five years of record-breaking figures and that these figures were undoubtedly very promising.

"The MHRA has already had three of its requests met and it is now looking forward to the next proposal being achieved," Zahra said, explaining that the government had already increased arrivals in winter and reduced electricity bills.

"The next challenge the MHRA has been mentioning for some years now is the VAT reduction, from 7% to 5%," Zahra said, adding that the association was sure this need would also be met in the next budget.

Zahra stressed that such a move would help make hotels cheaper and attract more tourists.

Zammit Lewis praised the MHRA for the effective suggestions that had been taken on board in the past.

"Conventions Malta was one such proposal, which started some weeks ago and brought together and organized the private sector to make Malta a centre for conferences," he said.

Zammit Lewis added that this year the service had been offered at no cost by the Malta Tourism Authority, but that plans for the future suggested that the entity become independent.

Discussing the Institute of Tourism Studies, Zammit Lewis said that there should be more involvment by the association to ensure an easier bridge between student life and the industry.

"We are looking at more sponsorship and placement opportunities, as well as closer work with ETC to help train those who have no specific qualifications to be able to enter the industry anyway."

He also added that the government hopes that the association would be able to help in giving people with disabilities studying at ITS better opportunities.

Zammit Lewis added that MHRA would also be involved in all issues involving Air Malta and that the ministry expected the association to support all of its decisions in this respect.

He added that the government was also working to secure more events similar to the Isle of MTV music festival during the winter months, even though this year had already seen a 7.2% increase in arrivals over the first five months of 2014.