The Italian-based airline, in which Air Malta holds a majority shareholding, has, according to Mr Attard, not found itself in a worse position than other similarly-sized European operators. He explains that it is a well-known fact that there are major European carriers who, because of their sheer size, are far more exposed and threatened than those the size of Azzurra.

However, Mr Attard, speaking to The Malta Financial and Business Times, explains, "Azzurra operates in an international unprotected market place and like all other airline operators in this sector it is exposed to the current happenings in the aviation market."

Mr Attard also spoke about rumours of potential layoffs and employment terminations at the airline.

He explains, "Azzurra employs around 400 persons. 10 of these are Maltese. There is no immediate threat to the 10 Maltese as reported in other sectors of the press. What Azzurra is doing is to take stock of the situation while down-scaling labour and other costs to contain the effects resulting from the drop in activity. Within the next month around 70 persons will have their contracts terminated and other measures are not being excluded.

"It is, after all, management's role to defend the long term interest of the company by taking short term difficult measures for the benefit of the longer term. I do not deny that the situation is challenging."

Meanwhile, Mr Attard stresses that the airline is also aware that out of this situation long term opportunities could arise and is accordingly very attentive to the behaviour of the market and of the business environment in the European aviation area.

Additionally, Mr Attard contends that closer ties with Air Malta, its principle shareholder, would benefit both sides. He adds that there is strength in synergising activities, work processes and systems as well as in sharing a common business vision.

The Azzurra CEO adds that the airline has an agreement with Alitalia that expires in March 2002. However, the agreement covers a part of Azzurra's activities since not all its activities are confined to Alitalia. The agreement with Alitalia is currently partially threatened and the two sides are working together to find short term solutions and to define a longer term co-operation platform which could also be advantageous to Azzurra.

Azzurra is also in negotiations with the lessors of the various aircraft leased to the airline with the aim of re-defining certain parameters. Some of these leases will come in for re-negotiation in the next three months