Good luck to Air Malta

The rebranding of Air Malta was a must and, though people may quibble with something here and there, as it will contribute to conveying a more positive image of the airline, after a long period where negative news dominated.   Rebranding projects are quite common where companies embark on projects to turnaround the business, and the money must be considered an investment in the future.

Air Malta has said that the rebranding will cost around €2m.  Maltastar has not seen a breakdown of the figure, but certain expenditure would have been made anyway.  For example, uniforms have to be replaced due to wear and tear and aircraft have to be painted every few years, not only because the paint becomes less shiny but because the aircraft itself could have increased drag and burn more fuel.  Presumably, the announced cost includes these items.  A negative could be that some of the aircraft are probably close to the end of their lease period from ILFC and will have to be repainted again then.

The new livery scheme is quite attractive.  As always, subjective views predominate (some airline livery schemes have been known to have been chosen by the Chairman’s wife!).   The prominent use of the word “ Malta ” on the fuselage is a plus point, as Air Malta is a destination carrier, not like Ryan Air which would never dream of calling itself an “Irish” airline.  The retention of the Maltese Cross is welcome.  Some might find the paint scheme in the aft part of the aircraft reminiscent of Caribbean airlines, but some others will like it.
Of course, rebranding on its own does not change the fundamentals of the business, except indirectly though its impact on the market and internally within the organisation, by conveying to the staff that the company is looking to the future, rather than to the past.  The fundamentals of the business must combine a strong marketing plan, flexible and keen pricing, the highest utilisation possible of the aircraft and of the capacity offered, enhanced revenue management, a constant efficiency drive, and an unremitting watch on costs (especially overheads).

The airline’s CEO has said that the company is on track to achieve the financial results as outlined in the restructuring plan, that is a loss of around €15m by the end of next March.  It better be.   The European Commission and Air Malta ’s competitors, who objected to state aid, will be watching the figures like an eagle and will not hesitate to attack the airline and request EC intervention if there are material deviations.  Even though the Government has tried to attack the PL on the question of state aid, the Opposition has played its part, particularly through its MEPs, to lobby the EC in favour of state aid for Air Malta.

Chairman Louis Farrugia was quite right to admit that the task ahead is still very tough.   True, increasing fuel costs can wreak havoc, but the EC will not accept this as an excuse.  Increasing fuel costs hit all airlines and God forbid that state aid should be given every time they do, except in very exceptional circumstances like a general crisis on the scale of post 9/11.  It is up to Air Malta to devise ways of tackling this in a manageable way.

The public has also taken note of ministerial statements that the government will not interfere in Air Malta .  After all, successive Nationalist Governments had also burdened the airline with excessive employees and interfered even in commercial decisions.  One hopes that such promises will be kept.