Air Malta looks to build on restructuring progress

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Air Malta is looking to keep up the momentum as it continues its restructuring efforts after returning to profit at an operating level for the first half.

The carrier has just posted a €400,000 ($522,000) operating profit for the six months to September. While the full year remains challenging as the first half represents its more profitable summer season, it does still mark a return to the black at the halfway stage for the loss-making Maltese carrier for the first time since 2008.

"We've had to make substantial changes," said Air Malta chief executive Peter Davies, speaking during a panel debate at the Airline Business-organised World Air Forum in Amsterdam. He points to the outdated processes and prodecures in place when he took the helm of the carrier.

Alongside improved revenues and load factors, the airline also cited reduction in its fuel and personnel costs as key to its profits improvement. Air Malta earlier this month struck a new labour deal with its pilots.

"My biggest task is what I call cultural revolution," says Davies, who has previously worked on turnaround projects at SN Brussels and what became Caribbean Airlines, of the challenges facing restructuring carriers. "Unless you bring the staff with you, if you don't convert or convince them, it isn't going to work," he says.

Air Malta has recorded a net profit only once in the last eight years and earlier this year secured European Commission approval for restructuring aid earlier €130 million from the Maltese government. Davies, who categorises Air Malta as a destination airline, believes there is a strong opportunity for the carrier. "If you concentrate on your knitting and what you are good at, and sell Malta, its got a lot of poential," he says.