The privatisation of the Malta International Airport and its financial implications

Abstract

Does privatisation contribute towards improving the financial performance of a company? This question has been the subject of much scholarly debate, especially in the spheres of politics and economics, both at a local and worldwide front. This dissertation consists of an analysis of the financial performances of the Malta International Airport (MIA) plc, which has enabled the researcher to tackle the privatisation matter from a financial accounting perspective. The research was conducted in a manner which allows for comparison of a number of selected average performance ratios between the pre-privatisation period and the post-privatisation period of the MIA. Moreover, the share performance was also analysed and compared to the Malta Stock Exchange (MSE) Index to gain a better understanding of the economic performance of the MIA after it was privatised. In effect, the findings of the case-study are in line with the literature containing arguments for or against privatisation. There was an overall significant improvement in the revenue of the MIA which later had a positive impact on the financial performance of the MIA in the period when it became privately owned. Furthermore, the study also reveals that the sale of ownership from Government to private investors has resulted in a better financial performance for the airport. These successful results imply that the economy of a country will probably benefit from a higher and faster growth if government-owned entities are sold to the private sector.