New national airline to start flying in March 2024

New national airline KM Malta Airline has to bid for Air Malta name • Government to invest €350m • €90m to buyout pilots and cabin crew retirement clauses

Prime Minister Robert Abela and finance minister Clyde Caruana address a press conference on the future of Malta's national airline
Prime Minister Robert Abela and finance minister Clyde Caruana address a press conference on the future of Malta's national airline

Key points on new airline

  • The new airline will operate 8 aircraft, three of which it will own
  • It will purchase back Heathrow and Gatwick slots
  • The airline shall retain existing 17 routes
  • It will employ 390 people
  • Government to invest €350 million
  • A new company will have to bid for Air Malta brand name

Malta’s new national airline has no name yet but it could still be called Air Malta and will commence its first flights on 31 March 2024.

The new company will be called KM Malta Airlines plc, which will tender for the Air Malta brand name currently held by a government holding company. The brand name will have to be issued by tender.

Finance Minister Clyde Caruana said the existing company, Air Malta plc, will formally cease operations on 30 March 2024.

He was giving details at a media briefing ahead of a press conference to announce the changes related to Air Malta, following the conclusion of talks with the European Commission.

Despite keeping the same brand name, Caruana insisted the new airline will be doing things differently to ensure it becomes operationally profitable by 2025.

READ ALSO: What will happen to your Air Malta bookings?

“Aircraft will fly longer hours and we will carry the same number of passengers as before COVID but from 17 routes. The new airline will ensure that every flight is profitable and so routes have to make commercial sense,” Caruana said.

The new airline will operate eight aircraft and eventually, three of these will be fully owned by the company rather than leased. The airline will operate on 17 routes.

The new company will re-employ the 390 people currently on Air Malta’s books and the recruitment process will start in December this year.

Workers will be given new work contracts commensurate with market conditions.

€350 million investment

Government will invest €350 million in the new airline. Of these, €300 million will be used to purchase three aircraft, purchase back the Heathrow and Gatwick airport slots from a government company, and the hangar and grounds around it at Gudja airport.

“These funds will be used to purchase assets that the new company will own unlike Air Malta today that only owns a hangar,” Caruana said. The other €50 million will be used for operational costs.

The minister said all customer tickets for flights on the current Air Malta until 30 March will be honoured.

Government will be setting aside €90 million to buy out early retirement clauses in the collective agreements of pilots (€75m) and cabin crew (€15m), Caruana said, adding it would be costlier to pick a fight with unions over these agreements.

Current Air Malta pilots and cabin crew employed with the new airline will have to decide whether to take the early retirement schemes in the first four years. If they take the schemes, pilots will not be able to get a job in the public sector, while cabin crew will be barred from public sector employment for six years.

Brussels talks

Talks with the European Commission had been going on for 30 months as Brussels rejected government’s bid to inject funds into Air Malta to prevent it from going bankrupt.

Instead, an agreement was reached to liquidate the company and create a new national airline unshackled by legacy issues. On government’s insistence, the new airline will retain eight aircrafts.

The agreement means that after three years, government will have to seek private investment for the part-privatisation of the new airline. Government will retain majority shareholding.

At a press conference inside Air Malta’s hangar at the airport, Prime Minister Robert Abela said Malta will continue to have a national airline flying Malta’s colours.

He said the actions being taken will ensure Malta continues to have a national airline. “Our job was to take decisions that create stability and ensure a sustainable future.”

Abela said government had intense talks with the European Commission but expressed satisfaction that certain parameters laid down by the government were met.

“This is a new beautiful chapter we are starting now just like the new chapter that opened 50 years ago when Air Malta was set up,” the Prime Minister said.