Air Malta towards dismantling and rebirth in an Alitalia scenario?

Fears that Malta’s flagship carrier Air Malta will not receive the agreement of the EU authorities for a recapitalisation could result in its dismantling and a rebirth similar to the Alitalia scenario.

State-owned Air Malta has been incurring heavy losses for more than a decade. Senior government officials speak of a likely refusal by the European Union for new state aid of 300 million euros to the carrier. Without a green light from the Commission, Air Malta will not survive.

If this green light was not granted, the Maltese government would therefore only have one option: liquidating Air Malta to create an alternative carrier.

According to local newspapers, the government has begun to draw up plans for an alternative carrier in a scheme similar to that of Alitalia: a new carrier would immediately take over the assets of Air Malta.

A government source told MaltaToday that this new company would have to be rebuilt from scratch, leaner and more efficient, and run on strictly commercial principles. Without state subsidies, the company should adopt a “low-cost business model”.

For the moment, discussions continue between the Maltese government and the European Commission, which still wants more information before making a final decision over the summer. In the event of a rejection of financial aid to Air Malta, the company should cease its activities at the end of the year.

Air Malta CEO 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 seems to have rejected the government’s request to inject nearly €300 million into the airline in a bid to save it. Malta would have a new national airline by the end of the year.