Government’s Plan B for Air Malta is already in place – report

Updated with GWU comments below

The Government’s roadmap for Air Malta’s future is already at an advanced stage of formulation, with the airline expected to follow the example of Italy’s national airline, Alitalia, and be wound up after the transfer of its profitable assets to another company, according to a report by The Shift News.

In its report, the media outlet writes that Minister Caruana and Prime Minister Robert Abela have already approved a plan to declare the dissolution of Air Malta and set up a new national airline at the end of October.

This would allow the new airline a fresh start with less personnel and debt.

Finance Minister Clyde Caruana has previously stated that this is the preferred option of the European Commission, which is deliberating on a proposal for Government assistance to the airline.

A last-ditch recovery plan for Air Malta was announced by Minister Caurana back in January, with around half its employees promised jobs in the public sector at the same salary levels.

In a report that seemingly contrasts with that of The Shift, MaltaToday reported on Wednesday that stronger-than-expected bookings over the summer season have led to a renegotiation of the planned job transfers, with the mid-August first postponed to October and then to the end of December.

A request for the approval of another cash injection following the impact of the COVID-19 pandemic has languished before the European Commission, which must sign off on all such state aid in line with strict competition rules.

Minister Caruana has stated that the Government’s plan to pump €290 million into Air Malta is being viewed with caution by the Commission, suggesting that it has lost faith in the Government’s handling of the airline, blaming it on predecessors’ repeated failure to deliver on promises.

Over the last years, Air Malta has sold off the majority of its assets, including two hotels, an insurance brokerage firm and lucrative landing rights at Heathrow and Gatwick airports.

Peter Agius, a Nationalist Party spokesperson and expert on EU affairs, took to Facebook to point out that many other airlines were granted permission to receive state aid by the European Commission.

He suggested that the issue in Malta’s request for state aid is a matter of trust. Speaking to BusinessNow.mt, he said that very public appointments like that of Labour Party propagandist Karl Stagno Navarra to the airline’s communications office would have served as a warning sign to the Commission, accentuating the lack of confidence in the Government’s approach to its restructuring.

“The first concern is the almost 900 families who depend on a job with Air Malta to put food on the table,” he said.

Mr Agius added that any attempt to blame the failure to secure state aid on the EU is “unacceptable”: “The Government cannot use Europe as the excuse for their incompetence.”

Questions sent by BusinessNow.mt to Air Malta chairman David G. Curmi, to the Ministry of Finance, and to the General Workers Union (GWU), which represents the airline’s workers, were not replied to by the time this article was published.

Update: Speaking to BusinessNow.mt following the publication of this article, GWU secretary-general Josef Bugeja categorically denied knowing of any plans by the Government to wind up Air Malta, and stated that the union has now called for an urgent meeting with the Ministry for Finance in order to clarify the situation.