Hoteliers want reassurances after controversial Montezemolo comment on Air Malta

Italian president of Alitalia, which will consider a 49% stake in Air Malta, claims acquisition would be “sub-zero risk investment” that won’t cost a euro

MHRA president Tony Zahra (left) and Alitalia president Luca di Montezemolo
MHRA president Tony Zahra (left) and Alitalia president Luca di Montezemolo

The Malta Hotels and Restaurants Association has expressed concern over remarks by Alitalia’s president Luca Cordero di Montezemolo, who said the acquisition of a minority stake in Air Malta was a “sub-zero risk” investment that would not cost a euro.

The statement raised concerns among hoteliers who said they felt Montezemolo’s comments prejudiced the value of the memorandum of understanding signed with the Maltese government.

“At this stage MHRA questions which process was adopted by government that led to choosing Alitalia as the preferred potential strategic partner for Air Malta over other airlines or solutions presented and reviewed. What is at stake is nothing short of the most important conduit for our economy. Any mistakes on the matter of Air Malta will definitely have serious and irreparable consequences on the economy,” the MHRA, whose president is hotelier Anthony Zahra.

The MHRA said that giving Air Malta for ‘zero euro’ as suggested by Montezemolo raised serious doubts on the strategic partnership and demanding that tourism minister Edward Zammit Lewis take note of the remarks.

Tourism minister Edward Zammit Lewis said the MOU with Alitalia will be published on 25 May. "A business plan will be prepared and evaluated by the two sides, and we will communicate the established targets... the Nationalist Party was a protagonist in bringing the airline to the brink of bankruptcy, but this is the moment to pull the same rope together and achieve a turnaround for Air Malta."

Montezemolo said the Italian national airline will be discussing a forthcoming memorandum of understanding for a 49% acquisition of Air Malta in June. “If it goes forward, it would be a zero-risk operation – sub-zero, indeed – for Alitalia. It is an investment that would not cost a euro, and would open up interesting connections with Sicily. Let us work on it, let’s carry out a management and economic due diligence,” he was quoted as saying.

Montezemolo’s comments sparked a debate as to whether any investment for the Air Malta acquisition will be carried out directly by Etihad.

Alitalia forms part of the satellite of airlines owned by Abu Dhabi based airline Etihad Airways, which has been in advanced talks with government over an equity investment in the ailing Air Malta since November 2015 as revealed by MaltaToday.

Etihad Aviation Group CEO James Hogan told reporters Wednesday in Rome that the ailrine was confident that Air Berlin and Alitalia would achieve turnaround. “We are halfway through the Alitalia restructuring process, which started less than two years ago,” Hogan said. “We are looking at cost synergies between Air Berlin and Alitalia and between Air Berlin and other airlines. But we are not integrating them.”

He also confirmed that the Italian carrier expects by the end of June to decide whether to buy a 49% stake in Air Malta.

Etihad, the No. 3 airline in the Persian Gulf, bought minority stakes in seven carriers from Australia to Europe to funnel passengers through its Abu Dhabi hub and share costs, and it has formed the aviation-group parent company as part of the process.

Alitalia plans to invest €400 million in its business this year and is evaluating options to add more long-haul aircraft to its 98 narrow-body and 24 wide-body planes, according to a presentation on Wednesday. Of the total, €240 million will pay for fleet expansion and cabin interior refurbishment, Alitalia CEO Cramer Ball said.

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