Questions sent to the Tourism Ministry and pending since last Tuesday regarding the ever-growing shroud of secrecy on the Air Malta–Alitalia talks have remained unanswered, despite numerous reminders being sent.
The ministry was given a Thursday 4pm deadline for answers, yet by the time this article was submitted, yesterday at 5pm (over 24 hours after the given deadline), no replies have been received.
Recent articles in the international press describe the financial problems Alitalia is currently facing. According to an article published on the 23 December by The Telegraph newspaper in the UK: “Loss-making Italian airline Alitalia has secured a two month reprieve from its creditors in a last ditch bid to agree a rescue plan to stem losses and bring in fresh financing. Alitalia’s creditors, including Unicredit and Intesa Sanpaolo, handed the carrier a short-term financing deal on the condition that it agrees an overhaul plan with its stakeholders within 60 days.”
The article also read that Alitalia reported a net loss of €199 million last year, and that the airline denied reports that it will slash 2,000 jobs as part of its new plan, however admitted it would reduce the workforce to “the right size, right shape” for the business.
Given the gravity of the news and the potential ramifications on talks with Air Malta, the ministry was asked by this newspaper how Alitalia’s financial situation is affecting the Air Malta deal.
The Ministry was also given a link to the Telegraph article, which also stated: “The airline has also said it will consider developing its long-haul network, drop unprofitable routes and reduce its fleet. Alitalia's future financing options are said to include fresh credit lines, tapping investors for more cash and a bond conversion which would allow its largest shareholder, Etihad Airways, to invest more without breaching EU ownership limits."
Given this part of the report, that Alitalia would consider dropping unprofitable routes and reduce its fleet, the Maltese Tourism Ministry was asked whether this would mean cuts and changes for Air Malta should the deal go through.
More questions sent to the ministry surround whether government is concerned about Alitalia as its prime choice for a strategic partner given the above news and whether government will break –off talks and look elsewhere, and whether Alitalia is Air Malta’s last hope.
Despite the fact that the government is rumoured to be seeking ways and means of injecting more capital into the struggling national airline Air Malta, the European Commission recently confirmed that no more state aid will be permitted. It was recently reported that the government had restarted negotiations with the European Commission to get the go ahead to inject more funds into the struggling airline.
Air Malta recently cancelled its Manchester route, which caused quite a bit of concern, especially considering they also recently cancelled its Frankfurt route. Government had previously said that the decision regarding Manchester is part of a strategy and internal changes that government is committed to implement so that the national airline can emerge from the serious difficulties leftover from the previous administration.
The Manchester decision was based on the fact that to continue flying the route Air Malta was projected to lose up to €2 million, the Tourism Ministry said a few days ago.
Air Malta has, however, plans to increase certain other routes such as Vienna and Zurich, which will have a weekly flight added to their frequency during shoulder months (April-June) and two added during the peak months (July-September). The Munich route will also be increased from eight to 10 weekly flights in the shoulder months, and 14 flights during peak season.
The airline has previously said that management's strategy is to continue focusing on the core and profitable routes; increasing frequencies on them.