Air Malta- The Air Line Of The Maltese Islands

Air Malta was set up by a Resolution of Malta's House of Representatives on 21st March 1973 and was registered as a limited liability company on 30th March 1973. The previous day, the Prime Minister as Minister for Civil Aviation had granted the company an Air Service Licence valid for ten years with effect from 1st April 1973. The licence was granted subject to the condition that the substantial ownership and effective control of the airline would, at all times, be held and exercised by the Government of Malta and/or by citizens of Malta and/or by companies incorporated under the laws of Malta and controlled by citizens of Malta.

In the words of its charter, Air Malta's primary aim is to establish, maintain, develop and operate air transport services to and from Malta which, by the carriage of passengers, freight and mail, serve the national interest.  Air Malta carries out these services under the regulation of the Maltese Department of Civil Aviation that has issued Air Malta a EU-OPS 1 Air Operator’s Certificate signifying that its operations’ safety level is similar to other European airlines that are regulated under the same standard of operation.

Air Malta started flying operations with two wet-leased Boeing 720Bs from Pakistan International Airlines (PIA) on 1st April 1974 with scheduled services to London, Birmingham, Manchester, Rome, Frankfurt, Paris and Tripoli. Its schedule now serves around 35 destinations in Europe and North Africa and operates with a fleet of Airbus A320s and Airbus A319s.

A major milestone for Air Malta was reached on 30th March 1982. After several months of intensive evaluation of various aircraft types from different manufacturers, the Maltese national flag-carrier signed an agreement with Boeing Commercial Airplane Group for the purchase of three B737-200 Advanced aircraft. Their delivery in March 1983 coincided with the airline's tenth anniversary celebrations. These first-ever brand-new aircraft soon became the backbone of Air Malta's fleet.

Air Malta is a firm believer in the importance of the fullest possible utilisation of aircraft. Within six months after taking delivery of its first three B737 aircraft, the Maltese flag-carrier established a world record with the highest utilisation for all operators of the aircraft type: 14.9 hours per aircraft per day in September 1983. In its very first year of A320 service the airline achieved some of the highest utilisation figures of the type worldwide.

In August 1986 Air Malta purchased two more B737-200As which were delivered in July 1987. The purchase was financed through a US$40-million credit facility from a consortium of ten international banks. This was the first-ever international financing for a Maltese borrower, and it was a source of considerable satisfaction to Air Malta that the loan, mandated to Chase Investment Bank, was oversubscribed in syndication.

Early in 1987 Air Malta signed two other agreements: one for delivery of an Airbus A320-200 airliner, delivered in August 1990, and another for the sixth B737-200A, delivered in March 1988. Also in 1987 Air Malta sold two B720Bs, leaving just one in the fleet. In March 1989 the airline exercised its option for a second A320-200, delivered in March 1992. The following month it ordered three new Boeing 737 aircraft (eventually deciding on the 300 series) for delivery in March, April and May 1993. The last remaining B720B was withdrawn from the fleet late in 1989. 

In October 1992 Air Malta wet-leased a British Aerospace Advanced Turboprop aircraft in order to increase the frequency of services to neighbouring destinations. It started by stepping up services to Catania, keeping Palermo on, as a year-round destination and starting operations to Tunis and Monastir. The ATP lease lasted 18 months.

In January 1994 Air Malta ordered four RJ70 Avroliners from Avro International Aerospace, for delivery between September 1994 and March 1995. The package deal included the replacement of four Air Malta Boeing 737-200A aircraft. The RJ 70’s enabled Air Malta to increase the frequency routes for the benefit of the business community.

In Spring of 1994 Air Malta leased a wide body Airbus A310 aircraft. The A310 was used on high density routes to Germany, London and the long-haul route of Dubai where its increased cargo carrying capacity which proved invaluable to the Maltese industry.

Air Malta was actively involved in the planning of the new air terminal at Malta International Airport, which was officially inaugurated on 8th February 1992.

Early in 1993 Air Malta took a fresh look at its cargo operation and decided to give it increased importance in its strategies, with a view to airfreight achieving a greater percentage of the airline's turnover. It set up CargoSystems to provide services ranging from third-party handling through warehousing, marketing, on-board courier services and, eventually, a dedicated scheduled freighter operation: a totally new concept for the airline.

For its revamped cargo operations the airline acquired the old Luqa air passenger terminal, which had become vacant following the move of all passenger-related handling activities to the new Malta International Airport terminal. The building underwent a complete internal refurbishing so that it could meet modern air-cargo requirements. The Air Malta CargoSystems and Transhipment Centre was officially inaugurated on 19th January 1994.

Almost since its setting up, the airline has sought to diversify its activities with a view to diversify its operations. The Air Malta Group incorporated a number of subsidiaries that reflect the parent company's operation. Amongst the organisations owned by Air Malta is Holiday Malta a tour-operating subsidiary based in London. It is the largest Malta 

specialist tour operator in the UK and Ireland and, as Air Malta Holidays in Scandinavia, Germany, Russia, Sicily and Greece, the company mounts a comprehensive year-round programme of inclusive holidays to Malta, Gozo, Comino and Sicily. Holiday Malta is also a leading incentive and group travel organiser.

In September 1995 Air Malta announced the setting up of its own captive insurance company, Shield Insurance Company (Guernsey) Ltd. The company operates out of Guernsey and was set up primarily to insure Air Malta's peripheral aviation insurance policies. At the same time the company also set up Osprey Insurance Brokers Ltd which catered primarily for the Group’s insurance requirements but also handles a number of 3rd party non-related accounts. Osprey handles all classes of business with it’s most specific area of specialisation being Aviation Insurance. The combination of Osprey and Shield has proved to be an effective risk management tool for the company.

Air Malta was awarded the JAR-145 Approval Certificate on 13th November 1997 by the French Director General of Civil Aviation after the European Joint Aviation Authorities delegated the French civil aviation authority to audit the airline's engineering facilities and procedures. Subsequently the Malta Department of Civil Aviation qualified as a full member of the Joint Aviation Authorities. Supervision of aircraft maintenance was taken over by the Maltese Authority and following a second pre-qualification audit, the Malta Department of Civil Aviation awarded the JAR-145 Approval Certificate to Air Malta on 20th August 2001. This approval reflects the internationally-recognised maintenance standards of Air Malta's aircraft.

In December 1997 Malta's House of Representatives unanimously approved a change in Air Malta's memorandum and articles of association. Air Malta was registered as Air Malta p.l.c. and the authorised share capital was increased from 11.65 million Euros to 81.55 million Euros.

In June 2002 Air Malta and Lufthansa Technik AG set-up a new joint venture by which, in January 2003, Lufthansa Technik Malta started performing engineering C-Checks on the complete range of Boeing 737 and Airbus A320 family aircraft for Lufthansa German Airlines, Air Malta and third parties. In 2009 LH Technic moved to a modern larger state of the art facility at Malta International Airport, giving the company the capability to service larger aircraft like the airbus A340-600 and even the largest passenger aircraft in service today, the airbus A380.

A month later Air Malta concluded a multi-million dollar agreement which involved International Lease Finance Corporation, Airbus Industrie and CFM International for the renewal of its fleet over a four-and-a-half-year period. Two major elements of the deal involved the sale and lease back from ILFC, a major American aircraft lessor, of Air Malta’s own two A320-200s and three B737-300s, and the lease of twelve new aircraft from the Airbus A320 family for a term of twelve years each. The new aircraft will be powered by CFM engines.

The first new Airbus A320 with registration 9H-AEF joined Air Malta’s fleet on 7th January 2004. The 168-seater aircraft, named ‘Valletta’, operated its first flight, KM146, to Manchester on the 8th January. The second new aircraft, an Airbus A319, with registration 9H-AEG and named ‘Mdina’ joined Air Malta’s fleet on the 4th of February 2004. This was the first time that Air Malta started operating a Maltese registered Airbus A319 in its fleet.

Since Malta joined the European Union in May 2004, new opportunities arose for Air Malta. The airline immediately took the initiative and started operating intra-European flights between Catania and London’s Gatwick airport. Air Malta also capitalised on these new opportunities by setting up bases in the UK and started to operate charter flights from the UK to a number of holiday destinations in Europe.

In July 2004 Air Malta announced that it has been awarded the ISO 9001-2000 certification by Moody International Certification Ltd for its airside ground handling services. Air Malta is the primary ground handling service provider at Malta International Airport and provides a wide range of services including passenger handling, loading of baggage and freight as well as cleaning of aircraft.

Over the last years Air Malta, like the rest of the global airline industry, has been facing difficulties as a result of erosion in average revenues, depressed passenger growth trends, escalation of operating costs and a depletion of its cash reserves. These factors, coupled with increasingly fierce competition and dynamic changes in the structure of the industry, have led Air Malta’s shareholders to request the Company to develop plans to cushion these effects and to provide a sound financial basis to turn around the Company. These included the reduction of expenditure and improvement of revenue streams. Such measures should mitigate the negative factors and provide for the long-term survival of the Company.

In May 2004, Air Malta reached a wide-ranging ‘Rescue Plan’ Agreement with the four Unions representing the airline’s employees. The milestone agreement showed the mutual intention and willingness of all the Parties to cooperate in order to solve the difficult financial position of the Company and to provide the basis to ensure that the airline can continue to play a major role in the Maltese economy. The three-year agreement paved the way for a restructuring exercise without the airline engaging itself in forced redundancies. Air Malta and the Unions also agreed to a far reaching cost-cutting exercise, the setting up of a Works Council, a moratorium on wages for the duration of the agreement and changes in restrictive work practices amongst other things.

The 2004 restructuring and the rescue plan were fundamental and a step in the right direction but were not enough. In 2010 the Maltese government requested the European Commission to authorise a loan facility worth €52 million for Air Malta in line with EU state aid rules. The Commission approved the measure temporarily, until it can take a position on the restructuring plan that was submitted by the airline. The plan is currently being studied by the Commission.

Air Malta has started implementing its restructuring in parallel with talks with the European Commission. The ambitious plan spearheaded by Chief Executive, Peter Davies includes a reduction in the airline’s workforce and targets cost reductions of €30 million and increased revenues of the same amount.

Air Malta’s Board of Directors is headed by Chairman, Mr Louis Farrugia. Its members include Alison Attard, Andrew Calascione, Alan Caruana, Adrian Coppini, Mark Micallef Eynaud, Roderick Chalmers and Helga Ellul.

Studies have shown that the airline today generates around 25% of the total expenditure by tourists and accounts for around 7% of the Gross National Product. Starting from humble beginnings with 53,500 passengers transported in the first year of operation, Air Malta now carries 2 million passengers every year and has transported around 40 million passengers to and from Malta since its first flight.  Air Malta has brought to Malta 63% of the 55 million passengers that have travelled to/from Malta by air since 1973.

There is a strong positive correlation throughout all these years between the amount of air passengers brought over by Air Malta and the overall air passengers to Malta.  Air Malta was instrumental in opening up and connecting Malta to the rest of the world and vice versa, in the process diversifying and opening up new tourism markets to and from Malta. The airline remains the main operator offering the most extensive choice of air services to get to Malta.

AirMalta Updates links:

http://www.airmalta.com/information/about/news-overview/news-detail/Three-New-Airlines-Choose-Air-Malta-as-their-Preferred-Ground-Handling-Partner

http://www.airmalta.com/information/about/news-overview/news-detail/Air-Malta-to-Open-New-Route-to-Algiers