‘Air Malta’s strategy is to blame for its losses’

The downsizing made by Air Malta during the Labour government’s first term in office led to the loss of millions in revenue and reversed the benefits of the five-year restructuring plan agreed with the European Union in 2012, airline sources have said.

The decisions taken by then tourism minister, Edward Zammit Lewis, and chairperson Maria Micallef to shrink the airline by reducing the number of planes, cutting routes and trying to sell the airline to Alitalia, led to a haemorrhage in revenue.

“The result is now out for everyone to see,” one source said.

According to the latest accounts, not yet deposited at the MFSA’s registry for companies as prescribed by law, Air Malta’s revenue was down approximately €25 million during the financial year ending March 2017, from the year before. That meant ending the year with a loss of more than €13 million, a figure three times higher than the €4 million in the red posted in March 2016.

Airline industry sources told this newspaper that the reason given by the government – that the losses increased due to fuel hedging agreements entered into over previous years – did not make any financial sense.

The airline’s fuel bill actually went down...