Malta will have a new national airline by the end of the year but the transition from Air Malta will be “largely seamless” for passengers, the airline’s chairman has told Times of Malta.
David Curmi said the creation of a new airline to replace Air Malta was in the final phase, as were discussions with the European Commission, which had rejected the government’s request to inject nearly €300 million into the airline in a bid to save it.
“We are nearing the end of long, difficult and complex discussions with the European Commission, which did not want a photocopy of Air Malta. We showed the commission that we mean business,” Curmi said in an interview.
“We created a five-year business plan and we are close to concluding on that. If we stick to this plan, then we will have a national airline that makes business sense.”
He was speaking after news emerged over the weekend that despite one last round of meetings to be held in the next few weeks, the commission is set to turn down the government’s request for an injection of state aid into the long-struggling national airline.
Times of Malta on Sunday quoted sources in Brussels saying the airline is likely to be shut down and replaced with a new one “right away”, potentially without disrupting the schedule.
On Monday, Curmi gave the end of 2023 as the target date.
“The new airline will have its own booking platform and tickets will be sold there. The old company will continue operations until the very end when the new airline will take over. That is why we’re anticipating that the transition will be largely seamless,” he said.
Air Malta received its last government injection in 2012 but had run into financial difficulties by 2020 as it never managed to become commercially feasible.
Two years ago, Malta asked Brussels for permission to pump €290 million into the airline in a last-ditch attempt to save it. It proposed a five-year state aid financing plan intended to help turn the company into a sustainable, profit-making enterprise.
We are nearing the end of long, difficult and complex discussions with the European Commission, which did not want a photocopy of Air Malta
However, Curmi said the commission prefers Malta to emulate the model used by Italy, which reached an agreement with Brussels to close down its flag carrier Alitalia and open a new national airline which it called ITA (Italia Trasporto Aereo).
“Malta will still have a national airline. What it will never be is a low-cost carrier. We will continue flying to key airports in key cities while continuing to fly cargo which is increasing exponentially because of an improvement in service,” the chairman said.
“The new airline will not be competing on price but on service. This will be our competitive edge,” he added.
Curmi explained that over the last few years, the airline had addressed the issue of overstaffing, a process he admitted was “painful”.
Asked what would happen to Air Malta’s current 330 employees – brought down from a workforce of more than 1,000 – he said they would be made redundant and would be able to apply for employment with the new airline.
He said the management had also successfully addressed another big issue, ground handling, which had now been farmed out and was being operated by a third-party contractor.
Finance Minister Clyde Caruana had said last year that plans to slash the airline’s workforce by half – as part of a major restructuring plan – “could very well be Air Malta’s last chance”.
Malta, the finance minister had said, needed to work hard to regain the trust of the commission, which had “lost faith in Air Malta because a lot of promises had not been kept”.
Curmi said the negotiations took long because Malta did not accept whatever the Commission ordered but proposed a different route which required painstaking discussions.
“We have been successful in restructuring because we stopped being an extension of a ministry. We have the full support of the shareholder (government) but absolutely no intrusion. We have managed to show Brussels that we mean business,” he said.
Air Malta has long been seen as a political pawn, used by politicians of all administrations to provide jobs and favours.