Air Malta warned the General Workers’ Union that its declaration of an industrial dispute did not fall within the definitions of the law, and that it would hold the union responsible for any consequences that may arise from its actions (Times of Malta, 05-Jul-2011). The union had registered an industrial dispute against Air Malta because no job guarantees had been given. The carrier’s restructuring plan includes 511 employees losing their jobs, and the government pledging EUR10 million to finance voluntary retirement. Air Malta stated it is not able to give such guarantees as the restructuring process is controlled by the company’s financial position. Air Malta maintains the right to sue the GWU for damages and has called on the union to not take actions that would further weaken the country. [more]
Air Malta warns GWU its declaration of industrial dispute is unlawful
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Air Malta Part 2: cannot match LCC unit costs; Alitalia not about to invest.
Part 1 of this report on Air Malta analysed its network, capacity development, codeshare partnerships and the competitive landscape in its markets. This second part looks at its financial track record and the development of its shrinking fleet and its financial track record. It also presents an estimate of Air Malta's unit cost position and the outlook in the aftermath of the Alitalia talks.
Air Malta's majority owner, the Maltese government, initiated a search for private investors in the loss making national airline in 2015. In Apr-2016 Alitalia signed an MoU with the government over the possible acquisition of up to 49% of Air Malta, but the two airlines announced on 13-Jan-2017 that talks had ended. It seems that the financial and political risks have prevented the investment from proceeding, particularly as Alitalia is wrestling with its own restructuring.
Its unit cost is efficient compared with European legacy airlines, but remains higher than the level of the LCCs with which it competes. Its short haul, non premium, point-to-point product has little with which to differentiate itself.
Air Malta has struggled to compete profitably and has reported several years of losses. A new plan is needed, and this may include a search for an alternative investor.
Air Malta Part 1: no longer the biggest airline in Malta as it struggles with rising LCC competition
On 13-Jan-2017 Alitalia and Air Malta jointly announced that the two had ended talks about a possible investment by the Italian airline in its Maltese counterpart. This throws the spotlight once more on Air Malta's struggle for viability in an increasingly competitive market.
In 2016 Air Malta cut its seat capacity by 12% and reduced its fleet by two, to eight aircraft. Having discontinued its North Africa routes, it is a Europe-only airline with no long haul network, focusing on point to point routes. A series of codeshares, including a new agreement with Alitalia, provide it with offline only access to long haul destinations.
Air Malta's highly seasonal and strongly leisure focused network is facing growing competition from LCCs. Indeed, its 2016 contraction coincided with expansion by Ryanair, which is now the biggest airline by seats to/from Malta. Modest capacity expansion is currently scheduled for 2017, but this is based on fewer routes, with more frequencies to partner hub airports.