Civil Society concerned over Air Malta's situation, calls on government to consider other options

The network of activists known as the Civil Society has expressed concern over the current state of Malta’s national airline with relation to talks with Alitalia and appealed to the government to consider options other than finalising talks with Alitalia

The government confirmed that it was still pressing ahead with a possible deal in spite of claims by Alitalia CEO Cramer Ball that the airline is currently losing €500,000 a day
The government confirmed that it was still pressing ahead with a possible deal in spite of claims by Alitalia CEO Cramer Ball that the airline is currently losing €500,000 a day

The network of activists known as the Civil Society has expressed concern over the current state of Malta’s national airline with relation to its strategic partnership talks with Italian national airline Alitalia, and appealed to the government have a solid decision-making process while considering other options.

“We note that despite its restructuring programme, Air Malta is still in a precarious financial situation,” Civil Society said. "We also note that the fate of Air Malta workers is unclear."

Air Malta is in the final year of a five-year restructuring plan that the previous government had agreed to with the European Commission in 2012, in return for its approval of around €130 million in state aid. Audited figures announced during the October meeting show that the airline posted a loss of €16.4 million for the year ending March 2015 and is set to reduce its losses to €4 million by 2016.

In July of this year, one of Air Malta’s lawyers, Aaron Galea Cavallazzi, had told a court that talks with potential strategic partners must be finalised by the end of October or Air Malta will no longer be able to operate, due to the airline being €66 million in the red.

Since the talks began, the ministry for tourism and Air Malta’s management has engaged in talks with workers’ representatives. Tourism minister Edward Zammit Lewis described these talks as “pivotal” in reaching agreements over “important guarantees”.
“One should appreciate that Air Malta was kept afloat, along with the guarantee that workers will not be laid off,” he said, adding that their working conditions was a red line not to be crossed.

The minister’s statement came months after the Central Representative Council of Air Malta’s workers lamented that the ministry for tourism, the government and Air Malta’s management had failed to provide enough information and concrete answers to questions raised by Air Malta’s employees over the future of the national airline, after it was announced that Alitalia, which is 49% owned by the Abu Dhabi based Etihad, will acquire a 49% stake in Air Malta.

Last week, the government confirmed that it was still pressing ahead with a possible deal in spite of claims by Alitalia CEO Cramer Ball that the airline is currently losing €500,000 a day.

The Civil Society noted that Air Malta has an important strategic function for Malta's economic and social needs. “Government should do its utmost to ensure that such a function is not lost, especially when the airline risks becoming over-dependent on interests with other conflicting priorities,” it said.

“We hereby appeal to the government to be more transparent in this matter and to ensure that its decision-making process is based on consultation, evidence and expert advice.”

Earlier this week, Zammit Lewis said that: “As a responsible government we are keeping all options open. We have an interest in closing the deal [with Alitalia] but not at the expense of the sector itself.”

Zammit Lewis remained adamant that the slow pace of talks, which are going into their sixth month, is “a cautionary measure” to ensure the best deal for the Maltese airline. “I hope that no one is expecting us to hasten the talks, risking a deal that might be against the interest of Air Malta or the tourism industry,” he said.

The Civil Society also appealed to the government to seriously consider other options to ensure the survival, viability and strategic interests of Air Malta. “Other options may include a hybrid strategy of floating shares on the Malta Stock Exhange together with having shares under government ownership, and having other shares sold to another airline without having effective control over Air Malta.”

Other proposals had come from the Nationalist Party, which in the past had proposed the selling of the airline’s shares, and later proposing that local investors should contribute to improve the airline’s situation. Zammit Lewis had not rule out the latter option.