Montezemolo lands tourism minister in hot water

Edward Zammit Lewis privately warned over comments by Alitalia president that a minority stake in Air Malta could come at little or no cost to the Italian airline 

Alitalia president Luca Cordero di Montezemolo
Alitalia president Luca Cordero di Montezemolo

Tourism minister Edward Zammit Lewis has been warned over the concerns expressed by stakeholders at comments from Alitalia’s president Luca Cordero di Montezemolo that a minority stake in Maltese national airline could go for little or no cost to the Italians.

Prime Minister Joseph Muscat has made it clear that Air Malta must continue to service Malta’s routes as a tourist destination if it is to sell 49% of its stake to Alitalia.

“Privately, Zammit Lewis was told that Air Malta has a price and is definitely worth more than one euro, unlike what Montezemolo said, and that the minister should be wary of technocrats playing down the airline’s value,” a government source has told MaltaToday.

But Zammit Lewis was terse in his reaction to this newspaper about progress on the Alitalia negotiations. “If there are no strategic and concrete advantages for Air Malta from the memorandum of understanding with Alitalia as an Etihad partner, nothing will be finalised.” 

Zammit Lewis said that at this very moment various technical aspects were being discussed with Alitalia.  The original negotiators included the deputy prime minister Louis Grech and Chairman Maria Micallef.  But yesterday senior reps from the tourism industry said that the negotiators were not safeguarding the interests of Air Malta.

Attempts to contact Maria Micallef proved futile.

But Montezemolo’s most worrying comment was about the advantages the Air Malta stake would offer to Alitalia in Sicily, proof that Alitalia’s strategic vision for a feeder airline does not match Air Malta’s expectations of expanding its routes to transcontinental hubs.

Montezemolo, 68, a former chairman of Ferrari and Fiat, said this week at a convention for Alitalia that Air Malta would not cost a euro in terms of investment.

“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.”

Montezemolo’s comments are sparking 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.

He continued: “We spoke about it yesterday during an interesting board meeting. We’ll be looking at it in the summer, maybe by end-June, and we’ll be able to take a decision.”

Alitalia’s potential acquisition would definitely lead to downsizing in the national airline, which is the reason the small airline has been losing out to low cost airlines such as Ryanair which this year will surpass Air Malta in terms of passenger arrivals at Malta International Airport.

The Malta Hotels and Restaurants Association has expressed concern over remarks by Alitalia’s president, saying 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 said, 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.

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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