[WATCH] Government to pursue ‘other leads’ for Air Malta, unions told

Failure of talks between Air Malta and Alitalia confirmed: Tourism minister says government is in contact with other local and foreign possible strategic partners

Edward Zammit Lewis: 'Contact already established with possible strategic partners'

Air Malta has called off negotiations with Alitalia and was now pursuing “other leads”, with contacts already established with other local and foreign parties interested in a strategic partnership with the national airline, Tourism Minister Edward Zammit Lewis announced on Friday.

Air Malta’s pilots, engineers, cabin crew and the General Workers Union were informed of the government’s decision during a meeting with the minister and the airline’s chairperson Maria Micallef.

MaltaToday on Sunday broke the news that the plug had been pulled on talks between the Air Malta and Alitalia, which had been earmarked to buy a 49% stake in the national airline. Doubts on the deal always focused on whether the agreement would ultimately benefit Air Malta’s employees and the country.

Following the meeting, Zammit Lewis confirmed that the government had already established contact with third parties that had expressed an interest in establishing a strategic partnership with Air Malta.

“Whatever happens, one thing is sure: Air Malta is not for sale, at any cost,” he said. “This is an important asset and we need to find a model that is suitable for our particular circumstances.”

The minister said the government had taken into account the interests of the workers and, after taking into consideration the country’s tourist network, had prepared for this very eventuality.

“More changes will be made in the airline, if necessary, even though some decisions might not go down well with everyone,” he said. “All decisions will be taken in the interest of making the company commercially viable once again.”

Zammit Lewis said the government had never been after a strategic partnership at all costs and that, coupled with some external influencing factors including Alitalia’s and Etihad’s own situation, led to the government officially ending talks with Alitalia.

The biggest obstacles, he said, were the tourist network and the impact on the workers.

The minister said that the airline’s annual accounts would be published “in due course”, but said the company had reached its financial targets for 2016.

He said the company would not be needing any subsidies, even because of important strategic decisions that had already been taken, such as cancelling the Manchester and Frankfurt routes and renegotiating the IT contract.

Air Malta chairperson Maria Micallef said that the airline needed the cooperation of all parties involved to ensure a viable future – with our without a strategic partnership.

She said that, while disappointed at not finalising with Alitalia, the company would go on, “business as usual”, to ensure the airline keeps flying.

Dominic Azzopardi, president of the Airline Pilots Association, said the unions would be meeting to discuss the news and said the minister had not explained how the government intended to proceed.

Yesterday, too, the unions were complaining that they were still in the dark over the future of the airline.

Later on in the evening, the Ministry for Tourism issued a statement making the news official: "Air Malta and Alitalia have jointly decided to terminate the talks which would have led to Alitalia becoming a 49% shareholder in Malta’s national carrier.

"The two airlines agreed that the current changing landscape in the airline industry was not ideal for such a transaction and that both airlines would concentrate on the current challenges without entering into a partnership together. Air Malta and Alitalia will continue to collaborate closely commercially through an extensive code-sharing programme already in place."

The Nationalist Party said in a statement that the failure to reach a deal with Alitalia was proof of the Labour government's lack of vision, that had led to a period of great uncertainty, unlike any other the Air Malta workers had ever faced.

"The government should stop insisting in pursuing dead-end roads and accept local investment for Air Malta, as proposed by the PN and the major stakeholders."

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