The target date for the completion of Air Malta’s restructuring plan has been extended to the end of the month as the “sensitivity” of the task made it more difficult to meet the early January deadline.

“Work on the restructuring plan has not yet been concluded, although significant ground has been gained and the work has reached very advanced stages,” a government spokesman said when contacted.

The government had set itself the ambitious target of having the plan in place by early January for submission to the European Commission, but this has now been pushed back by a few weeks.

Despite this, the government is still well ahead of its EU deadline for the plan and there will be ample time to discuss the reformprogramme with the EuropeanCommission.

If the Commission is not satisfied with the plan, it can pull the plug on the urgent rescue aid it granted Air Malta, which suffered losses of €31 million in 2009 and is expected to go deeper in the red in 2010.

The restructuring plan is one of the conditions attached to the Commission’s approval of €52 million in emergency aid to keep the national airline afloat.

The plan is being prepared by Ernst and Young senior officials, led by Alan Hudson and Robert Palmer, former Easy Jet group financial controller, who is overseeing the airline’s commercial operations. Relevant Air Malta management and technical staff are also actively involved.

Sources close to the airline told The Sunday Times this was the first time such an “extensive X-Ray” of Air Malta was being carried out. Previous restructuring plans had never gone into such detail.

“This is the biggest review of the airline’s operations. The team are going into a detailed analysis of Air Malta’s cost structure and expenditure right down to the last cent being spent, examining its existing business model, its needs and revenue streams,” the sources said.

No details have yet emerged on the plan of action, but The Sunday Times reported in November that Air Malta could not survive unless it shed staff and “Brussels would never permit state aid to subsidise unproductive jobs”.

The Commission too had in a document on Air Malta painted a bleak picture and said thecompany required major surgery if it was to survive.

According to this document,Air Malta has been in the red since at least 2003, with the situation worsening in 2009 due to rising fuel costs and the loss of market share to low-cost airlines.

The company employs 1,512 staff and should it collapse it could affect a futher 2,672 workers employed with various suppliers, the Commission had said.

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