Air Malta has posted an operating loss of €30 million ($36.3 million) for the full year to 31 March 2012, marking a €4.3 million improvement on the previous fiscal year.
The Maltese flag carrier says two key factors impeded its full-year performance - high oil prices and forced capacity reductions under its restructuring programme.
Last month, the European Commission waved through €130 million in state aid for Air Malta, voicing confidence that the government's restructuring programme should enable the flag carrier to "become viable within a reasonable timescale".
The plan entails significantly reducing capacity and selling assets - measures which the Commission said assuaged concerns about distorted competition.
High oil prices also had a negative impact on the bottom line, with the carrier's average fuel expenditure rising by €17 million during the fiscal year. This was partly offset, however, by a €3.5 million cost saving achieved through fuel hedges.
Overall, full-year revenues increased by €7 million to €214 million, while capacity will have fallen by about 20% by the end of 2012 under the restructuring programme.
Lower capacity has already pushed load factors up by 2 percentage points to 75.2%, with yields also increasing by 5% to €100 per passenger.
"The survival of the company is intrinsically linked to the ability of the airline to rapidly and successfully execute a range of cost and revenue initiatives," says chairman Louis Farrugia. "The restructuring plan shows that the existing level of losses can be turned around to break-even levels by full-year 2014 and to profitability by full-year 2015."
For 2012/13, Air Malta expects to halve its annual losses to €15 million while increasing load factor by another 2.3 percentage points. This will be achieved through measures as diverse as downsizing staff, optimising reservation systems and boosting ancillary revenue.
Proactive fuel cost management will also be pivotal to future profitability, the airline says, noting that its current hedging positions for the 2012/13 fiscal year afford it a price advantage of 2.8% over its competitors' fuel expenditure.
Air Malta's average forward Brent crude price for 2012/13 is $108.75, compared with $111.89 for its rivals. The airline has hedged 79% against 90% for its competitors.