| AIR MALTA p.l.c. A story of flying colours Capt. Robin. J. Zammit Since the dawn of aviation, air-services to and from Malta, have always been an essential part of the country�s lifeline to the rest of the world. Although the Air Malta we know today is relatively young in comparison with other national carriers, Air Malta has the privilege to boast that it was the first private airline (amongst all the former British colonies and even British independent airlines) to obtain, when still part of the British Empire, an Air-Service Licence. This was in 1948 when Air Malta Ltd. was given a licence to serve several destinations from Malta, then part of the British Empire. The company flourished, until some internal manoeuvring caused it to lose its licence to its competitor, Malta Airlines in 1951. Malta Airlines used its licence to engage British European Airlines, BEA, to operate all its services on its behalf. Air Malta Ltd subsequently succumbed to the blow, and as of 1951, continued functioning as airport ground handlers under the name of Malta Aviation Services Ltd. , taking care of all the airport handling for airlines that operated to Luqa. In 1975, it re-entered the flying scene, by becoming a shareholder, and transferring its entire trained staff and equipment to today�s Air Malta Co. Ltd. , spurred on by the Government as majority shareholder. Several attempts were made at the setting-up of a Maltese national airline in the Sixties, coinciding with the island's first tourism boom, however, BEA�s contract till 1 April 1971, soon scurried all attempts. A promising venture was initiated in 1969, however the project was shelved when an expatriate involved in the project left the Malta scene abruptly. Serious Government discussions to set up a national airline commenced in 1971 and the new Government had talks with more than ten foreign airlines that had expressed their interest in supplying their expertise to set up the national airline. Until then no Maltese had enough experience in any of the white or blue-collar positions of an airline, and it was decided that the airline must be set up under the guidance of an established airline. Negotiations protracted for several months, if not years, as new, interested parties came forward with better proposals. It all looked set for Pan Am to get the contract, when Pakistan International Airlines (PIA), which started negotiations very late in the day, emerged with the most favourable conditions. PIA had just lost its operations in East Pakistan, which had gained its independence and became Bangladesh, thus leaving the airline with surplus staff and equipment. It was eventually agreed with PIA that the Malta Government would be the majority shareholder with 51% of shares, whilst PIA would invest 20%. The share capital was authorised at LM750, 000, of which LM530, 000 were issued, whilst the rest (29%) remained unsubscribed. PIA�s investment also brought with it its commitment to provide a management team to run the airline in its fledgling years, whilst simultaneously train Maltese personnel to all positions, with the ultimate aim of having a full Maltese-staff complement. In it's charter it is declared that "the company's primary aim is to establish, maintain, develop and operate air transport services to and from Malta which, by the carriage of passengers, freight and mail, serve the national interest. With a view to the attainment of this objective, the company is also empowered to engage itself in the travel trade and tourist accommodation business, as well as to undertake any other activities - whether in the aviation sector or in other areas - which would be conducive to its profitability". On commencement of the contract, PIA seconded to Air Malta large numbers of pilots, flight and ground engineers and other selective posts, until such time that the new airline was in a position to use local resources. The Government held the right to buy PIA�s 20% stake within an agreed time frame. Air Malta also wet-leased two Boeing 720bs from PIA for a five-year period, with an option to purchase. Air Malta Co Ltd. was registered as a commercial company on 31 March 1973, and its first chairman was John Mizzi. PIA sent over a General Manager and four senior mangers responsible for Marketing, Finance, Ground Operations and Flight Operations. Many Maltese were sent for training in Pakistan, including a set of 12 pilot cadets, engineers who all undertook intensive training in their respective fields of competence. For the period, between the time Air Malta was set up, until it started operating a year later, Air Malta provided a continuity of air connections between the island and other destinations by using the services of British European Airlines (BEA). This had been made possible through an agreement made by the Government and BEA, that the British company would continue operating the services that it had been operating out of Malta on behalf of Malta Airlines since 1951, until Air Malta commences its own operations. On 24 January 1975 Malta Airlines took 5%, whilst Malta Aviation Services Ltd. took 1% of the unsubscribed shareholding in Air Malta. The two companies had agreed to take up this shareholding, in-lieu of payment for assets, which the respective companies had at Luqa Airport and elsewhere, and which were to be utilised by Air Malta. Subsequently, on August 11 that year, the Government raised the share-capital of the company to LM1,250,000 in order to increase working capital. At the same time the authorised share capital was called up, with the Government subscribing 76.4%, PIA 20%, Intercontinental Services (formerly Malta Airlines) 3% and Cassar & Cooper Holdings Ltd. (formerly Malta Aviation Services Ltd.) 0.6% of the shares of Air Malta. In November and December 1985 Middle Sea Insurance purchased the shares owned by Intercontinental Services as well as half of those held by Cassar & Cooper. In November 1980, the Government had exercised its option to purchase PIA�s shares in the Company, resulting in the State owning 96.4% of equity. In a valuation exercise for this deal, it was deemed that each share was worth 100% more since the initial investment seven and a half years previously. On 2 March 1989, Parliament approved a resolution to increase Air Malta�s capital from LM1,250,000 to LM5,000,000. The latest change in share-capital took place in December 1997, when the Government approved an increase to LM 33,000,000. The termination of the agreement with PIA meant, that as of November 1979, Air Malta had a Board of Directors composed entirely of Maltese nationals, and from then on, the company has been run exclusively by Maltese management, except for the Flight Operations and Engineering sections. Today, only the Flight Operations Department is run by an expatriate, who, at any rate, can be considered Maltese by adoption, due to the length of service he has given to the airline. After officially being setup on 31 March 1973, deputy Prime Minister Dr Anton Buttigieg inaugurated Air Malta's first flight, on 1 April 1974, as he observed KM108 take off to Rome, after Archbishop Michael Gonzi had blessed the aircraft. By the end of its first year of operations, Air Malta had carried 160,000 passengers on its network, which started out as London Heathrow, Birmingham, Manchester, Rome, Frankfurt, Paris and Tripoli. Its fleet consisted of two Boeing 720-047bs, leased from PIA, and by 1979 the fledgling company owned five of the type, having bought a further three from Western Airlines (USA) in addition to the two leased aircraft, which were also purchased, as well as a leased Boeing 707. Capacity was increased by leasing a variety of aircraft each summer, to augment the busy summer season. In October 1980, the first of three Boeing 737-2K2s arrived on a three year wet-lease from Transavia Holland. These aircraft swelled the fleet to eight aircraft, and allowed the company to diversify into the inclusive tour charter market, a strategy that in the eighties was to see most of the company�s operations dedicated to this market. Air Malta�s success in the charter market, convinced management to put in an order for brand new aircraft, for the first time in its history. Three Boeing 737-2Y5s were ordered for delivery in 1983, with a follow-on order for a further three to be delivered from 1987. Within six months of delivery from Boeing, the company established a world record for the highest utilization for all operators of the type: 14.9 hours per aircraft per day in September 1983. Air Malta itself has since surpassed even that figure. With the delivery of its first new aircraft in 1983, the company also unveiled a new aircraft livery, which was a slight alteration from the company�s previous attractive colour scheme. In the eighties, the Boeing 720s started to be withdrawn from use. The first, 9H-AAM, the company�s first aircraft, was grounded in 1981, and used as a spares-ship for the remaining four. The second 720 to leave the fleet was 9H-AAN in 1984, whilst a further two 9H-AAK/L were disposed of in 1987. That left 9H-AAO the last operational 720 in Europe, and by December 1989, when it too was withdrawn, it was the last 720 in commercial airline service in the world. During this period, the company would receive many requests from aviation enthusiasts from around the world, inquiring about the 720�s routes, and would come to Malta with the specific reason just to have flown on this classic beauty. The Nineties brought with it a new corporate image for Air Malta, when it introduced its new livery in December 1989. For a short period during that month, all three liveries that had adorned its aircraft since inception could be seen on the Luqa ramp, until the final 720 left to its new owners in Uruguay in early 1990. The new corporate image was not just a change in aircraft livery and company logo, but also its vehicle fleet was re-sprayed to match, as well as new staff uniforms and all office interior designs. The aircraft interiors were also refurbished in 1992, with all aircraft having Recaro seats and upholstered with the company�s motif, matching uniform ties. This was part of the airline�s new strategy to slowly do away with the low-yield charter traffic and concentrate and expand on its scheduled operations as its core business. Up to 1989, the company served only fifteen scheduled destinations, expanding to nineteen that year. Just four years later, by summer 1993, operations had doubled to 30 scheduled routes and by 1996 another twelve had been added. In 2000, 53 scheduled destinations were being served, with routes spanning most European and North African and Middle Eastern capital cities including the Arabian Gulf as well as New York in North America. Several other cities are also served on its charter operations. A foray into the North American market was also operated for a two year stint in the mid-nineties, when the company bought a consolidation of seats on a Balkan Boeing 767, which staged through Malta twice weekly on its way to New York. Although the operations were a marked success, the agreement was not renewed by Balkan, leaving Air Malta looking for a new partner to operate the route. This materialized in 2000, when almost simultaneously Air Malta signed a code-share agreement with TWA as well as commencing its own direct services to New York JFK. The agreement with TWA covered several points in North America connected with Air Malta flights into Milan and London Gatwick. On 22 June for the first time in its history, an Air Malta flight departed JFK en route to Malta via Shannon. The service was operated by Boeing 757 equipment on wet lease from American Trans Air, under a three-month contract, and all indications are that the company, being satisfied with performance on the route, will go it alone with its own equipment in 2001. Actually Air Malta was one of the pioneers of code sharing, a buzzword that became popular in the late eighties and nineties. Air Malta code shared with Alitalia in the late seventies, using the latter�s DC-9-32s on the once weekly Saturday flight from and to Catania, until the agreement terminated in 1981. For the next few years there were no operations to Catania, until Air Malta started its own weekly flight. Today it flies there twice daily. It code shared with Tunisavia on twice weekly flights to Tunis and Sfax, using different types of aircraft, such as FH-227B, HS748, DHC-6, HPR-7 Herald and Viscounts on the routes in the eighties, until it started to operate the Tunis route independently. It later code shared with Tuninter on flights to Djerba during the United Nations sanctions on Libya between 1992 and 1999. Air Malta also code-shared with Libyan Arab Airlines on flights to Benghazi, until the sanctions forced the suspension of flights in 1992. Another code-share agreement was with Singapore Airlines on flights to Amsterdam, using Boeing 747-200 equipment, which operated with part Air Malta cabin crew. Singapore Airlines would operate on to the Dutch City after coming to Malta from Australia, operated in agreement with Air Malta. Qantas and Air India, in turn, had similar agreements, operated over the summer season for Maltese migrants in Australia with Boeing 747 equipment and Air Lanka with Lockheed Tristars. Air Malta also code shared with CSA on flights to Prague. Today the company has code share agreements with TWA on several gateways in North America and Gulf Air on flights to Bahrain. Air Malta is 25% shareholder of Med-Avia, a Maltese airline operating in Libya on oil-field routes. It owns four CASA 212 regional aircraft as well as operates a number of VIP executive jets, including Boeing 727 and BAC 1-11 airliners on ad-hoc leases to African heads of State. The company is based in Malta and employs around 70 people, mainly Maltese, including local pilots. Air Malta is 100% owner of Malta Air Charter, which operates a helicopter service to Gozo. The company operates two Mil-8 helicopters on wet lease from Bulgaria. The service has proved to be very welcome for Gozitans and tourists alike, as well as businessmen looking for a quick trip to the sister isle. At times it is also the only means of transport to Gozo due to the frequent interruption of the ferry service. Although this service is loss making, Air Malta has taken it upon itself to maintain the trips as a social service since the service has now become, for many, indispensable. In 1994 the company helped set up Excalibur Airlines in the UK. Air Malta also held a 25% holding in this company, which operated a fleet of Airbus A320s on the UK charter market. In 1996 it set up another airline, this time in Italy and has 49.9% of Azzurra Air, a fast growing Italian regional airline. Today Azzurra operates a fleet of 8 RJ70/85s and two 737-700s. In a recent interview, Dominic Attard, its Maltese CEO, stated that it has plans to expand its fleet to 26 aircraft over the coming years, thus soon dwarfing its own parent company. Air Malta also owns several hotels in Malta including the five-star Crowne Plaza, four-star Accore Selmun and Hal-Ferh tourist complex. It also operates all passenger and aircraft handling services at Malta International Airport as well as Air Supplies, the Duty Free operator at Luqa. Other companies include a UK tour operator, which specializes in Malta. Air Malta also does its own aircraft maintenance. Air Malta Engineering, one of the most important departments in the airline, was quick to acquire certification to perform the many checks required on airframe and engines, including the H check, which takes place on aircraft which have been in service for around 10 years, and involves a total strip down and virtual rebuild of the aircraft. By the mid-eighties, the airline was certified to take on third-party maintenance, and the company's first client was African International, a cargo company operating flights on behalf of Alitalia. For some reason (probably staffing), management decided against this lucrative business, and it was halted shortly after. By 1998, the Engineering section was of JAR standard and recognized as such, thus giving the airline a very credible rubber stamp on the quality of its maintenance. By August 2000, Air Malta employed a record 154 pilots, including 20 foreign Captains and 15 First Officers, as well as four Maltese Captains seconded to Azzurra. The Maltese consist of several groups, sponsored by the company as well as direct entry license holders. The ab-initio training for the sponsored groups were held in Pakistan (1976), Yugoslavia (1983), Perth, Scotland (1987), Cranfield, England (1990), Perth, Australia (1991) and Bremen/Goodyear USA (1995). Since the last sponsored course, several groups of self sponsored cadets were taken in, and on going to print there are a further two groups under training. Air Malta perform simulator training twice yearly in Simulators in London and Rome. It's training department also set up annual refresher courses in the technical subjects, Safety and Dangerous Goods Training as well as Crew Resource Management. Since Air Malta's policy is one of high utilization of its pilots, Air Malta can boast of having very experienced flight-deck crew, with Maltese becoming Captains in their late twenties, and flying on average over 800 hours a year, which, when compared to the industry norm of 600 hours, gives the local pilots 25% more exposure and experience than the average airline. In 1997, the Flight Operations took on a new challenge, that of wet leasing out. Crew was provided for a British Airways BAe 146, on flights from Heathrow to Stuttgart, whilst the latter's runway was in the process of being extended. In 1999 the company leased a set of crew to Air Holland, flying a Boeing 737 on their charter network out of Schiphol. Simultaneously, an aircraft and crew were damp leased to Macedonian, an Olympic Airlines subsidiary. In 2000, one aircraft and crew were leased to Air Malta's sister company, Azzurra. By comparison to other airlines, Air Malta's 27 years of existence is indeed brief. It is a small airline, by any scale. However when one keeps in mind that the company operates from an island on the fringe of Europe, just 315 square kilometers in area, with such a small population, and virtually no domestic market, one can see the incredible success that the management and staff have all contributed to achieve along the years. The company owes much to the sterling service of its successive chairmen; John Mizzi, Albert Mizzi, Joe N. Tabone and Louis Grech. The island has reached physical saturation in the summer months, and the only room left for expansion are the winter months, as well as hubbing, which, since it was first focussed on in 1995, have began to produce around 15% of Air Malta's total passengers. "The challenge of change" was Air Malta's motto in the mid-nineties, and whilst still valid today, history has proven that the company has excelled in triumphing at each and every challenge. This article was written for "Airlines in Malta", published 2000 by the Malta Aviation Museum |