The Malta Independent 20 August 2017, Sunday

‘Preferred option’ for Air Malta will be for government to keep majority shareholding – Muscat

Kevin Schembri Orland Friday, 19 May 2017, 12:21 Last update: about 4 months ago

Prime Minister Joseph Muscat said today that the "preferred option" for Air Malta would be for government to keep a majority shareholding.

He was addressing a press conference on the tourism sector when he made the following statement.

"Air Malta has a future. We have no intention to fire any workers from Air Malta. We intend that, as the unions are asking, to provide early voluntary retirement schemes. We know that the financial results for Air Malta are improving. Our intention is to reach an agreement with a strategic partner. We have a number of informal talks ongoing. They have not been made formal as the MU has not been arrived at. What I can confirm is that there are different consortia from different continents."

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"We would like the consortium we conclude discussions with to include a strategic partner, and not only include persons or entities which are equity or investment funds. One of the biggest challenges for any small airline is its purchasing power when it comes to leasing airplanes. If you have a fleet of 10 planes it's one thing, but if there is a strategic partner with 70 or 80 aircraft then you are able to get a better price."

He spoke about the usefulness  of a strategic partner when it comes to the purchase of fuel, and in the IT systems. He said IT systems controlling booking and revenue need to be cutting edge.

"As we saved Enemalta we are committed to save Air Malta. We are not excluding any form of structure or shareholding, including local shareholding, in this regard. I must add that the preferred way we would like to work with is that government, as happened with Enemalta, keep the majority of shares in the company. This, obviously will always be a bone of contention in discussions as everyone would want majority shareholding."

"The difference between what the PN is saying - regarding the BOV model, which provides that government have a say but won't hold majority shareholding, is that we still believe that given the strategic value of Air Malta we should still hold the majority and that is our preferred option."

Asked by the Malta Independent whether by saying that it is government's "preferred option," then he means that this could see a situation where government would no longer hold the majority shareholding, he turned his guns on the PN, saying that "this is the Opposition's proposal, that government should not be the majority shareholder, but be the main shareholder. This is not our preferred option and our negotiating position is that we want government to remain the majority shareholder."

Asked further questions about Air Malta and said that there are a number of leads. One of the main issues is due diligence when it comes to the consortia he said. Stating that people and entities have been put aside as government, following their due diligence exercise, did not feel that they would be right for the airline.

He said that there are good leads regarding partners for Air Malta, in which talks are ongoing and the due diligence on these are being done. "We had informal meetngs with this consortia and in one case, there is one led by a large equity firm. When they first came to us we told them we did not want to speak with an equity firm without a strategic partner being involved, and they came back with a letter of commitment from strategic partners who are ready to join that consortium."

He said that over the past four years this government stabilised Air Malta, "And now we have to do thing that need to be done without firing people. However the rumours of Air Malta being divided up into parts is nothing but speculation."

Tourism agreement with China 

Tourism Minister Edward Zammit Lewis announced that government, last week, signed an MOU with a Chinese tour operator and a Chinese bank to attract 10,000 high-net worth tourists to Malta.

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