New government airline paid €58m for Air Malta's airport slots - media report

The slots were sold to Malta Travel Services, a new airline set up by the government, and will now be leased back to Air Malta

Air Malta has sold its coveted landing slots at Heathrow and Gatwick airports to Malta Air Travel for €58m, according to local media reports.

Malta Air Travel was set up by the government back in January in order to purchase the slots. Tourism Minister Konrad Mizzi had said at the time that the slots had no value on Air Malta’s books, and selling them to another government airline would allow Air Malta to “give value” to the slots.

Moreover, Mizzi has repeatedly stated that the move also meant that the slots would have been safeguarded in the eventuality that Air Malta went under.

The new government company, which became an airline last week after obtaining an Air Operating Certificate, will now lease the slots back to Air Malta so that it can continue using them in its operations.

In comments to the Times of Malta, Air Malta chairman Charles Mangion said the slots would be leased back to Air Malta for a 20-year period, with the airline having an option to extend for another 20 years.

Mangion insisted that the arrangement should avoid controversy since it meant that the payment to Air Malta was not in the form of a government subsidy.

He said British airport authorities had already approved the transfer of the slots, but said the government was still awaiting a definitive answer from the European Commission.

It is unclear what will happen should the Commission interpret the transfer as a breach of state-aid rules.

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