In the wake of the long drawn out collapse of the government’s talks with Alitalia over a strategic partnership with national airline Air Malta, the airline now appears to be flying on nothing more than a wing and a prayer.

That the talks with Alitalia were destined to failure had been a given for quite some time and the writing had been on the wall in big, bold letters for practically months before the government informed the unions, and then the press, of the talks’ failure.

The national airline has rarely been clear of turbulence over recent years. From its near bankruptcy and the €130 million bailout in the form of the state aid it had been given in 2012 under the previous government, to the current government’s failed bid to entice a strategic partner in what would effectively have been be another bailout for the long-suffering airline.

Now the airline intends going it alone, perhaps because the government’s long and winding search for a strategic partner has been all but exhausted. But in order to do so and to somehow remain on an even keel it now intends offering pilots and cabin crew early retirement schemes.

Air Malta appears to be on its last wing and its last prayer, with the government now seeking European Commission approval for this one last-ditch effort in the form of an injection of state aid to fund early retirement schemes for pilots and cabin crew.

The problem here is that any such scheme is very clearly a case of state aid, aid that the European Commission has said will not be allowed. This newspaper had reported back in December that the European Commission would not approve any more injection of funds into Air Malta.

In December the Commission said in unequivocal terms that, “In view of the previous restructuring aid to Air Malta approved in 2012, the airline is currently not eligible to receive any further rescue or restructuring aid” – in line with the EU’s ‘one time, last time’ principle when it comes to state aid. The government, however, may just have something up its sleeve to convince the Commission to let it have one more go at saving the airline.

The European Commission had cleared the previous €130 million after an investigation that lasted several months, and now the question is whether it will approve yet another injection of state aid after the 2012 cash injection was meant to have solved the airline’s financial woes once and for all. But the restructuring plan attached to that cash injection has clearly failed, and failed miserably. And after such a terrible result the last time around, it is difficult to see how Brussels would be able to approve yet another restructuring plan and an accompanying cash injection.

Now, this newspaper is informed, the government has brought in a team of foreign experts to draw up this new and improved restructuring plan to be pitched to the European Commission. That plan is apparently being structured on the premise of creating a three-year vision for the airline to finally reach the breakeven point, with a far leaner workforce created by the retirement schemes that will be offered. 

In 2012, over 500 employees had applied for the early retirement schemes offered and although staff reduction is by no means the only restructuring process the airline is expected to embark on, it will certainly be one of the most fundamental. That 2012 exercise, however, had applied a far broader brushstroke while the current exercise will specifically target cabin crew and pilots.

Recent analyses carried out by the airline have shown that it desperately needs to cut down on its workforce yet again, particularly in terms of pilots and cabin crew, if it is to somehow compete with the Ryanairs of the industry that are operating on far leaner human resource models than Air Malta.

It may be that Air Malta does not have a future but if there is any chance whatsoever to save what is a strategic national asset, the government must seek to employ every means at its disposal to save the airline.

Should the European Commission approve yet another restructuring plan and the accompanying state aid to fund the retirement schemes, it will well and truly be the airline’s last chance. Let us hope the airline is given this one last fighting chance for its survival.