Various savings with renegotiated Air Malta contracts, says minister

Tourism minister Edward Zammit Lewis said national airline Air Malta had underwent extensive reforms to make good for a €230 million restructuring programme mandated by the European Commission, in a reply to PQs by Labour MP Anthony Agius Decelis.

Zammit Lewis said Air Malta had revised and renegotiated catering contracts, IT and telecoms contracts, airliner leases, fleet rationalisation, savings on office rentals, and cost controls.

He said that in the financial year ending March 2015, the airline had closed a promise-of-sale agreement for its properties in Luqa, with the government, as well as a €10.9 million sale of the Selmun Palace Hotel to the government; saved €4.1 million on catering with Sky Gourmet; sold Osprey Insurance for €1.36 million; saved €1.25 million on a renegotiated IT contract; renegotiated GSAs; €800,000 in savings on two airliner lease renewals; and €8.2 million in savings on fleet rationalisation.

Zammit Lewis said that the renegotiation of various contracts up until 2018 will deliver a further €1 million in savings from service providers.

Air Malta has benefited from state aid since 2012 under strict restructuring conditions from the EC, receiving €20 million, and then followed up with another €58 million up until January 2015.

Another €52 million was loaned to Air Malta, which was converted into equity for the government.

In 2004, the airline exchanged a €53 million property in an equity swap with the government.