EC ‘perhaps’ asking for more details from Malta than others on Air Malta state aid, says Finance Minister

Finance Minister Clyde Caruana has said that discussions with the European Commission (EC) around the provision of state-aid to struggling national flag airline Air Malta have been delayed for so long because it is “perhaps asking Malta for more information than other countries.”

Speaking on Wednesday, the Minister explained that discussions have “been on-going for a long time since the Commission is analysing every fair rate, expense and profit, for each and every Air Malta flight, for the duration of the pandemic that we have asked to be financially compensated with.”

Malta’s Government applied to the EC in October 2020 to provide state aid to the airline due to the losses it incurred as a result of the COVID pandemic.

European Union rules prevent Member States from providing financial assistance to any enterprise, whether private or state-owned, in order to preserve competition rules. However, these rules have been relaxed during the COVID-19 pandemic, especially for companies in the hard hit tourism and aviation sectors.

Examples of state aid recently given the green light by the EC include €120 million in state aid to Aegean Airlines, €290 million to Brussels Airlines, and €7 billion to Air France, by the Greek, Belgian and French Governments respectively.

“Their [assessment method] is very technical,” said Minister Caruana, “the process is immensely labour intensive and involves very long spreadsheets. We are obliged to respond with all information they asked for.”

Air Malta’s financial woes have been something of a thorn in the side of successive Governments – with the EC previously accepting two applications to provide state aid to the ailing airline in 2010 and 2012 respectively – and the COVID pandemic has only exaggerated this.

However, its chairperson, David Curmi has expressed optimism about the outlook of the wider tourism industry, saying it is “increasingly likely” that passenger numbers will hit pre-COVID levels in 2023.

“Provided travel restrictions and unilateral measures imposed by national governments continue to ease, it is becoming increasingly likely that the recovery might well take place a year earlier i.e. in the second half of 2023,” he predicted last month.