In the wake of Friday’s official announcement that the government’s negations with Alitalia to take a 49 per cent stake in Air Malta had crashed and burned, the government is understood to have now turned to private investors outside the aviation industry to keep the struggling airline afloat
Sources within the industry, who preferred to remain anonymous considering the sensitivity of the situation, have informed this newspaper that the chances of landing a strategic partner in the form of a major airline have now been all but exhausted and that the government is turning to private investors – Maltese, foreign or, more likely, a combination of both – to inject the much-needed cash flow into the beleaguered airline.
After the failure of negotiations with Alitalia, the government has had to resort to a non-strategic partner – an investor that does not necessarily have a track record in the aviation industry. The main prerequisite now is having the funds to firstly save the airline and secondly to hire the right people to plot the right course toward the sustainability the airline so desperately needs, such as it sought to do with the Vitals Global Healthcare in the health sector.
Financial experts speaking with this newspaper, meanwhile, claim that it would be virtually impossible for an all-Maltese consortium to raise the funds required for such an investment in Air Malta on their own steam.
As such, a White Rocks model could also be employed with Air Malta, according to sources. In the case of the White Rocks Development Company, the development will be carried out by a consortium made up of a number of local and foreign companies. That consortium includes hotelier Tony Zahra, who is also, according to sources speaking with this newspaper, seeking investors for Air Malta, and he could be looking at a similar investment set-up for the airline.
Time proved us right – Tony Zahra
Speaking with this newspaper yesterday Tony Zahra, who is the president of the Malta Hotels and Restaurants Association, said the news that the Alitalia and Air Malta deal has now been officially called off comes as no surprise.
“We have been saying the same thing ever since the news broke that the two companies were to become strategic partners. We were never impressed by it because we simply could not picture a synergy between the two airlines.
“It has been our position for quite some time now that the solution for Air Malta lies with the Maltese,” he added. Mr Zahra, who has never held back from criticising the now defunct deal, said that the national airline should adopt a Bank of Valletta model, through which the bank is 80 per cent is owed by the private sector and 20 per cent by the government.
On his part, the Tourism Minister had said on Friday evening, “We’re not here to please someone with a hotel here or there.”
Back in September Opposition leader Simon Busuttil had insisted that investment in the national airline should come from local sources, a suggestion that the government had flatly dismissed at the time.
The government has so far not commented on who the interested parties might be, but on Friday evening Dr Zammit Lewis did not discount the possibility that the government could bring in private investment, rather than an airline, to fill the void left after the talks between Air Malta and Alitalia broke down.
Just after delivering the news of the breakdown of talks with Alitalia to Air Malta’s unions on Friday, Dr Zammit Lewis confirmed that there are negotiations taking place with other investors. He said they could be local or foreign regarding a potential cash injection, but said he could not divulge any information on the interested parties at least for the time being.
Of interest is the fact that the minister had mentioned the possibility that local investors could be brought in, which is believed to have been the first time such a prospect has been raised in public.
The European Commission had recently confirmed that no more state aid would be allowed to be injected into the airline, as reported by this newspaper last month.
GWU says national airline needs to find ‘strong partner for job security’
General Workers Union General Secretary Josef Bugeja yesterday said when contacted that the union will keep discussions with Air Malta ongoing with regard to both the restructuring process and the collective agreement with the workers.
“The national airline now needs to find a strong strategic partner that can guarantee a future for the company, while offering job security to its hundreds of workers.”
Mr Bugeja said that in the coming days, the GWU will be issuing an official reaction to the collapse of the Alitalia deal.