Manuel Agius was recently named chief officer cargo at Air Malta in Luqa, Malta. In an effort to strengthen freight, Air Malta has tasked Agius with setting up the cargo division as an independent business unit. On average, Air Malta moves 4,800 tonnes of cargo per year. Agius spoke with Air Cargo World about the island of Malta’s freight industry and Air Malta working to set up a free trade zone at the airport in the future.
Tell me about Malta’s air cargo industry.
The airfreight market in Malta basically is pretty dominantly import cargo. Bear in mind that we don’t have resources, so most of the stuff comes into Malta. When it comes to exports out of Malta, mainly it’s the manufacturing industry, in particular pharmaceutical products. As far as import is concerned, we import any kind of product. In other words, anything you can imagine is imported into Malta by airfreight. So in terms of the market, the overall Malta cargo business, it depends on airfreight. Other freight into Malta and out of Malta is trucking services and seafreight. So I would say those are the three modes of transport into and out of Malta. The airfreight mode is experiencing competition, especially from the road transportation, especially cargo that moves to and from European destinations.
There are fully-fledged companies that provide road transportation to and from Malta. Basically, it works out like this: They carry out the pickups throughout Europe, and they freight it in on their trade lanes over the weekend into Malta with a transit time of average between three to maximum five days. Naturally, being road transportation, obviously the cost element is far more competitive than the airfreight. But withstanding this, the airfreight business has continued to experience stability in the market.
Describe Air Malta’s cargo operations.
Air Malta traditionally is a passenger airline. It operates to 35 destinations, mainly to Europe, including North Africa, like Tripoli and Algiers. In terms of equipment, we operate with the A319 and A320 aircraft, so these are passenger aircraft. Cargo is an important source of revenue for the airline, making use of the empty belly capacities of our passenger flights. In addition to that, to augment our capacities, we also operate a once-weekly freighter operation to and from Frankfurt with a 757 freighter airplane. So more or less, we’re looking to fill our passenger capacity and sustaining that, and providing better equipment for heavy and bulky cargo throughout our Sunday freighter operation between Malta and Frankfurt. So cargo is an important source of revenue to the airline. Now, we don’t normally carry cargo, in other words our product varies from cargo and mail, and also on-board courier. More or less, we provide service to these three kinds of commodities.
Tell me about your efforts to set up the cargo division at Air Malta.
My experience with airports goes back to the very early days of Air Malta, and I was the one way back in 1990 to set up the Air Malta cargo assistance department. I spent some years outside Air Malta and recently, I joined Air Malta to fit in with the new strategy that Air Malta is looking at into establishing a cargo department as an independent business unit. So my task basically is to develop the cargo business, look into new opportunities and at the same time, look into creating a cargo village within a free zone area at the airport, whereas before we were looking at simply using our cargo capacities, the passenger capacities. The vision for the future is much more ambitious and developing the cargo in general.
Malta has an advantage. Being an island, we already have a free zone area for shipping lines. Now the distance between the free zone area for shipping lines and the Malta International Airport is only about 20 minutes by truck away. So having a similar situation at the airport, one can generate new business in conjunction with the shipping terminus.
Why does Air Malta want a separate business unit for cargo?
The idea basically is the cargo would function completely as a business unit within the airline rather than supporting. The strategy is that the cargo department or division will eventually be a profit center on its own, so not to be constrained with the philosophies of the passenger requirements. Our prime objective will remain filling the capacities of our passenger flights. At the same time, we want to venture into new opportunities being an independent unit, which can grow our business’ cargo.
What new opportunities?
We’re looking into land and air transportation. In other words, we can transport by truck, as an example, cargo from Malta to Holland and connect with another airline far beyond Europe. We want to expand our network. We’re looking into modes of transport to support the airfreight business. As an example, we’re looking into using air-land into Malta, in other words bringing things from the Far East, and hubbing into Europe, and we bring them by truck into Malta. So an association with the partnerships of various airlines we have and through interline agreements, we could make use of both modes of transport for the benefit of both our customers and also the airline.