Air Malta is a classic example of how business should not be done, Finance Minister Clyde Caruana said on Friday. 

Speaking during a Times of Malta event, Caruana promised "brutal reforms" to turn around the airline's fortunes.

He said Air Malta has over the years been burning through assets and hiring "hundreds" of employees that it did not need. 

The finance minister said Air Malta had been burning through €40-45 million annually. 

Caruana said the company had done other things that "had not made sense", such as continuing to pay workers who had opted for early retirement two-thirds of their salary until they reached pensionable age. 

He said such deals need to be removed from the collective agreements between the airline and unions. 

Under his tenure, Caruana said, Air Malta's seat load factor - the number of passengers on each flight, had reached 95% capacity. 

He said the airline needs to increase its hours in the air to further increase revenues. 

On the latest round of early retirement schemes, the finance minister said he had no choice but to go down this road. 

Outright firing people would have likely led to strikes and Air Malta being grounded. 

"There is a price that needs to be paid for past mistakes. I am the guy who needs to do it", Caruana said. 

He warned that the company's restructuring will not be pain-free but if these reforms are not carried out, the country risks not having a national airline, he said. 

However, in a quick-fire round of questions at the end of the event, journalist Ivan Martin asked Caruana if the issue of Air Malta would finally be resolved by the end of this year.

"Yes," he said.