Around one-third of Malta’s national airline KM Malta Airlines is to be privatised, with Finance Minister Clyde Caruana saying he wants that to happen as soon as possible.

The decision was a condition imposed on Malta by the European Commission as part of the deal giving it the go-ahead to fold Air Malta and set up a new carrier, Caruana said on Thursday.

Around “30% or 35%” of the airline will be sold to the private sector, Caruana said, adding that he hoped that would happen “ASAP”.

"It has to happen," Caruana told an audience during a live interview with Times of Malta editor-in-chief Herman Grech.

KM Malta Airlines was announced a year ago after government attempts at securing EU approval for a fresh injection of state aid into Air Malta failed.

Instead, the government negotiated a transition from Air Malta to a new national airline that would start flying on March 31 of this year.

KM Malta Airlines has done well in its first six months, the finance minister said on Thursday, noting that it was operating with just one-third the workforce that Air Malta employed.

Caruana had indicated that the airline would be partially privatised when he first announced it in October last year. The idea was also hinted at in an interview KM Malta Airlines chairman David Curmi gave aviation trade magazine Airliner World last month.

But the plan was never spelt out until Thursday, when Caruana made it clear roughly one-third of the airline’s equity would be sold to the private sector.

Caruana did not provide a deadline for that to happen.

Times of Malta understands that the government’s favoured route is for the eventual buyer to be directly involved in the aviation industry, allowing KM Malta Airlines to benefit from the investor’s sectoral knowledge and economies of scale.

KM Malta Airlines flies a fleet of eight aircraft and operates flights to 17 destinations.