Airlines must get state aid, lobby tells government as Covid-19 hits tourism hard

Malta Business Bureau calls on government to make full use of flexibility proposed under EU Temporary Framework on State Aid rules

The Malta Business Bureau has called on the Maltese government to make full use of a relaxation of state aid rules by the European Union.

The MBB made special mention of airlines – with Air Malta flights now having suffered an immediate setback – currently sustaining damages due to the Covid-19 outbreak, as being eligible for compensation even if they have received rescue aid in the last ten years.

“In this case the ‘one time last time’ principle does not apply,” MBB president Simon De Cesare said.

The European Commission has announced a temporary framework on state aid rules which is now being consulted with EU member states. Among others, these would allow member states to introduce measures such as schemes of direct grants or tax advantages of up to €500,000 to a company, subsidised state guarantees on bank loans and public and private loans with subsidised interest rates.

The Malta Business Bureau welcomed the European Commission initiative which acknowledges the state aid flexibilities required at this desperate time to save strategic companies such as airlines as well as thousands of small and medium enterprises facing unprecedented challenges to keep afloat.

“Time is of the essence for these measures to be actioned immediately. The economic slump has come upon companies so swiftly that many businesses cannot cope, particularly as there is no end to this crisis yet in sight,” De Cesare said.

“Our responsibility is to keep our customers and our employees safe, but also to safeguard their jobs and livelihoods. Companies on the front-line like tourism and tourism-related sectors, are unable to do so without the necessary support nationally and at EU level. Companies are already having to deal with the huge burden of no income coupled with wages of employees who are unable able to work.

“Liquidity and access to finance are also essential in order to stabilise operations and resist the economic pain in the medium- to long-term. For this, we urge EU member states, particularly the Maltese government to action these measures the earliest possible and roll them out widely to all affected companies. Small measures will not have the stabilizing effect the country needs right now.”