Air Malta to sell airport slots to new government company

Malta Air Travel has signed an agreement with the national airline to buy its overseas slots and lease them back to it • New company will own its own aircraft

Air Malta will transfer its airport slots to a newly-formed government company
Air Malta will transfer its airport slots to a newly-formed government company

A new government company that will be purchasing airport slots from Air Malta was incorporated on Wednesday, according to the government.

The company, Malta Air Travel Services (MAT), is wholly government owned and was set up with an authorised share capital of €70 million, the government said in a statement. 

MAT is also in the process of obtaining an air operator's certificate (AOC), allowing it to qualify as an airline, and be able to own the slots. 

"The Government’s objective for the setting up of the new company, which by law requires an air operating certificate, is to own Air Malta slots in various airports," read a government statement.  

"Concurrently, the new government company is undertaking to enter into a lease agreement so that the same slots will continue to be operated by Air Malta at an agreed commercial fee for a long-term period."

The business model will see MAT initially acquire Air Malta’s lucrative slots at Heathrow and Gatwick in the UK for an undisclosed sum, which will be determined by an independent company, sources said.

Moreover, as part of the requirements for obtaining an AOC, the new company will be required to own an aircraft, which would likely be leased back out to Air Malta.

The announcement comes a day after Air Malta closed a collective agreement with the GWU, leaving pilots alone in resisting proposed changes at the airline.

The government has insisted, the collective agreements were crucial to ensure the airline’s long-term viability after failing to return to black at the end of a painful restructuring process. Air Malta is planning a considerable increase in the number of routes it services over the next 12 months.

Sources told MaltaToday the creation of MAT was one way of ensuring Air Malta received a cash injection for its major assets – the airport slots, as well as ring-fencing them and offering the airline flexibility in the eventuality that the airline takes a turn for the worse.