Air Malta is surviving from day to day and the pilots' planned one-day strike would cost it millions, perhaps even sounding the death knell for the beleaguered airline, senior company officials told The Times yesterday.
The officials said the company was staying afloat on what remains of the €52 million rescue aid package it was given last November and on the cash it is generating from one day to the next. A standstill of one day, especially in summer, could be enough to make the airline bankrupt.
Apart from the lost revenue for the day, Air Malta would also have to compensate passengers who are delayed or whose flights are cancelled, according to the sources.
It would also have to pay for any alternative arrangements to operate as many of its flights as possible and incur extra costs to reschedule operations.
"A day's strike will cost us a bomb and we are not sure the company is in a position to survive financially under the present circumstances," the sources said.
When asked whether the company's existence was threatened by the strike, Finance Minister Tonio Fenech refused to be drawn, although he warned it would cripple the company.
"We respect the right of every union to strike. However, in the current circumstances, a strike will cost the company dearly and will surely cripple it. If a company is already on its knees, you can't give it another blow as you will surely floor it," Mr Fenech, in Brussels for the Ecofin meeting, said.
The Prime Minister and Mr Fenech are today expected to meet all the unions representing Air Malta to give them the latest details on the situation regarding the company and the ongoing discussions with Brussels over the restructuring plan for the airline.
Mr Fenech yesterday denied assertions made by Airline Pilots Association president Dominic Azzopardi that the company had used a substantial part of the €52 million aid to pay back its dues to Bank of Valletta. "This is absolutely untrue and these stories are continuing to harm the reputation of the company," he said.
He said BOV was very helpful with the ailing airline and, over and above, its previous loans had provided another temporary loan during the rescue aid discussions with Brussels last November to keep the airline flying. "I am informed that even this loan has not been repaid yet."
As agreed with the Commission, the government last May sent a draft restructuring plan to Brussels, on which the approval of a one-time financial injection to the company depends.
According to EU state aid rules, airlines can only be given a one-time injection over a period of 10 years and the company is expected to be back in the black after five years. If not, it will have to fold. Air Malta has been in the red for several years.