Tourism Minister Edward Zammit Lewis this evening told unions that the Air Malta-Alitalia deal has fallen through. This was the first time the government confirmed that the negotiations between the two airlines had broken down since the news first came out on Sunday. 

"We looked at whether or not it would benefit employees and our touristic network; and we were prepared for this eventuality" The Minister told the press.

The Minister also said that there are negotiations taking place with other investors, which could be local or foreign, regarding a potential cash injection, but he could not divluge any information on the interested parties.

The Minister could not provide any timeframe for when a deal could materialise, and would not give any guarantees that this could happen before the elections in 2018.

In an official statement issued later, the government said 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.  

When asked by The Malta Independent as to whether or not there is a possibility that Air Malta would not be saved, the Minister said that as the party who created the national airline, the current government has no intention of allowing AirMalta to fail.  

"We are prepared to take decisions, as was with the sandiwches, which saved the airline 4 million euros, the decision of Frankfurt and Manchester, the renegotiation of information technology, we have done alot of work and will continue making strong decisions. We managed to do all this without firing any employees or reducing wages " the Minister said

The Air Malta-Alitalia negotiations were first confirmed by the government in April of last year, when Dr Zammit Lewis announced the signing of an MoU between the two airlines. This opened up negotiations with the hope of seeing Alitalia buy a 49% stake in Air Malta. UAE-based carried Etihad Airways owns 49% of the shares in Alitalia.

There were many bumps along the way, the most notable being when Alitalia President Luca di Montezemolo said Air Malta was a ‘sub-zero risk’ operation which would not cost the Italian airline one euro. 

Throughout the past few months the government denied several reports that the deal had fallen through but this time round it is official – negotiations are over and Air Malta remains without a much-needed strategic partner.

It is looking increasingly bleak for the ailing airline with the European Union Commission confirming that no more state aid would be given to Air Malta, as was reported in The Malta Independent on Sunday. 

The uncertainity surrounding the airline increased in recent months when Air Malta begun chartering foreign low cost aircrafts for a number of their flights , when asked to whether or not he felt it was fair that customers who pay high rates are left with an inferior service the Minister said that whilst he expressed solidarity with the people who used these aircrafts, he maintained that it was more important that AirMalta always kept to its flight schedule.

He also attributed the use of the afoementioned aircrafts as a means for filling in the gaps left by Air Malta airplanes which needed maintenace or service and was not a cost cutting measure.