Air Malta reduces losses; on target for more improvement
Published: August 11, 2012
Air Malta (KM) has reported a slightly reduced operating loss of €30 million ($ 37 million) for its year ended Mar. 31, improved over a €34 million loss for the previous year.
The airline said that two factors impacted its performance and that its operating loss excluding these would have been €21 million. The first was a 20% reduction in capacity (10% in 2011 and a further 10% in 2012) required by the European Commission for the airline to receive state aid from the Maltese government (ATW Daily News, June 28). The capacity reduction is part of a restructuring plan approved by the Commission, which translated into an estimated reduction in profitability during FY2012 of €4 million.
The second was fuel prices, which increased 30% during the year, adding €17 million to the FY2012 fuel bill.
The airline said that it was starting to see improvements as a result of the restructuring efforts, despite the adverse economic conditions across Europe.
FY 2012 operating revenues increased €7million to €214 million, and despite the capacity reduction, KM increase revenues through a number of commercial initiatives that included improved yields (€105 per passenger in FY2012 compared to €100 per passenger in FY2011), a 2% improvement in load factor from 73.2% in FY2011 to 75.2% in FY2012, and a number of ancillary revenue initiatives that together have generated a gross revenue improvement of more than €20 million.
Restructuring plan benefits including reduced personnel costs began to feed through in the second half of the financial year. Early and voluntary retirement schemes brought the number of full-time employees down from 1,249 to 1,026 during the financial year, and the airline expects that number to come down to 923 in the financial year ending March 2013. KM also benefited from a waiver of all Malta landing fees for all airlines during the winter.
Passenger numbers for FY2012 were slightly down, at 1.76 million passengers compared to 1.82 million the previous year.
The airline said that, during the next financial year, restructuring plan initiatives are expected to enable it to halve this year’s loss to €15 million.