Tourism Ministry confirms Air Malta’s debts reach €66 million

'This negative equity is the consequence of the accumulated losses made by the airline in the past years,' a spokesperson for the Tourism Ministry says

Following the statement by the national airline’s lawyer in court on Friday about the company’s delicate financial situation, a tourism ministry spokesperson confirmed that Air Malta’s current debts reach €66 million.

“This negative equity is the consequence of the accumulated losses made by the airline in the past years,” the spokesperson said.

This comes after tourism minister Edward Zammit Lewis had told Parliament on 7 December 2015 that the airline’s debt in 2012 stood ta €75 million and the airline was aiming to bring this down to €4 million in 2016.

However in the financial year ending in 2016 it was the airline’s losses which were cut down to €4 million.

In comments to MaltaToday, his spokesperson  said “Air Malta has successfully managed to reduce its losses over the past years. At the end of the last financial year, Air Malta lost €4.2 million, after losing €16.9 million the previous year,” adding that in 2012 - the first year of the EU commission’s restructuring plan - the airline suffered losses of €38.5 million.

The tourism ministry however added that the reduction in losses is not enough and warned that a deal with a strategic partner will only be done if government’s objectives for the airline are reached

“To survive, the airline needs to aim to grow and return to profitability and we believe that the best way to achieve this is to enter into a strategic partnership with a bigger airline which would help us increase revenues and reduce costs through economies of scale we do not enjoy at the moment as a small standalone airline.”

In the ongoing court case between the pilots’ union and Air Malta, the airline’s lawyer Aaron Galea Cavalazzi said that the national airline was €66 million in the red, prompting Mr Justice Silvio Meli to warn that if no agreement is reached over the pilots’ wage demands the airline would go bankrupt.

More in National