10 JULY 2002

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Multi-million dollar Airbus deal for Air Malta

All the mounting speculation on which company was going to provide Air Malta with its new leased fleet came to an end last Friday with the announcement that the national airline concluded a multi-million dollar agreement with French-based Airbus Industrie.

At the press conference Air Malta Chairman Louis Grech addressed the controversy that had been building in some sections of the print media on the intense competition between Boeing and Airbus for the contract.

Mr Grech said that the criteria adopted by the company during the selection process were purely technical and financial. He adamantly excluded any political pressure to opt for one international company rather than the other.

"Both Boeing and Airbus were running neck and neck for quite some time but in the final package Airbus came out better, and this was unanimously approved by the Air Malta board and other independent consultants," Mr Grech reiterated.

Asked to make public the size of the deal, Mr Grech would not reveal the amount citing commercial reasons for doing so. "I would like to publish the figures so that everybody could see what a good deal the company has brokered, but it does not make any commercial sense to do so," Mr Grech told the media.

The agreement was brokered with the International Lease Finance Corporation of the US for the renewal of Air Malta’s fleet over a four-and-a-half year period. ILFC is an international lessor company and offered Air Malta a choice between Airbus and Boeing.

The deal sees Air Malta disposing of its current fleet and acquiring a new fleet on a lease basis. The objectives of the deal were to generate immediate cash for the airline, protect the airline’s current assets from premature depreciation, acquire a low-cost but high-quality fleet and improve the airline’s competitive base.

The lease back from ILFC involves Air Malta’s own two A320-200s (Airbus) and three B737-300s (Boeing), and the lease of 12 new aircraft for a term of twelve years each, which will be A320 family aircraft. Air Malta’s current aircraft will be leased for a period of three years and will be phased out of the fleet on the way.


Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
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