Air Malta's fate to be decided after summer

As negotiations with EU on state aid drag on, a final decision on whether to shut down Air Malta will be taken once peak tourist season is over


Air Malta's fate is to be decided once and for all at the end of summer, BusinessToday is informed.

Senior government sources have confirmed that Prime Minister Robert Abela will take a final decision on whether to close down Air Malta for good once the peak tourist season is over.

The sources said that - bar some extraordinary late-minute development - everything points to the government declaring the national airline bankrupt and shutting it down, after setting up a new company to take over.

But the final decision has been postponed to after the summer so as not disrupt travel plans by Maltese and tourists.

Plans for the new airline are at an advanced stage, despite the strong increase in passenger numbers by Air Malta month on month in 2022.

The Maltese government is currently in negotiations with the European Commission over the prospects of future state aid for the ailing national airline, although a positive outcome seems unlikely.

The alternative company would be necessary to retain Malta’s connectivity with the rest of Europe, without depending on third-party airlines.

The new airline would be rebuilt from scratch.

“The plan will mean a more streamlined and efficient company run on strictly commercial lines,” a sources said, suggesting a more cut-throat approach to the business of running the government-owned airline.

It would also mean new conditions of employment in which employees, most notably airline pilots, will be expected to mirror the same conditions as in rival and competing airlines in terms of flying hours.

The new airline will of course have to be run without state aid and will therefore not be able to retain Air Malta’s original role of providing alternative routes that might have been not entirely commercially viable but very convenient for Maltese passengers.

In 2022, finance minister Clyde Caruana in 2022 had already said that Air Malta required a capital injection “but when and how this will happen depends on the decision the European Commission will make.”

A year earlier, he warned that without the green light from Brussels, “Air Malta will not live. It will just have weeks to live.”

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