The Malta Independent 15 August 2022, Monday

Air Malta: Not A case of engaging friends – Tonio Fenech

Malta Independent Tuesday, 7 June 2011, 00:00 Last update: about 12 years ago

Finance Minister Tonio Fenech yesterday announced that a company had been contracted to help in the Air Malta restructuring process and it was not a case that people were engaging friends to take up positions with the airline.

The clarification came at the end of a press conference in reply to questions after the government announced a scheme to compensate hoteliers caught in the VAT increase transition process.

Air Malta engaged the company for a definite period and Ray Hart, who has worked with the airline’s new CEO Peter Davies before, is leading the restructuring process.

Mr Davies must identify Maltese people qualified and willing to run the process within six months, Mr Fenech noted.

He has been engaged with Air Malta for a three-year period. Mr Hart will be with the company for six months, but the person responsible for Human Resources has, for instance, been engaged for two months. Other posts like that of the Chief Financial Officer are still to be filled.

He went on to point out the delicate situation which the company and the government have to deal with. The restructuring plan was submitted to the European Commission over the past weeks and it must be convinced the government has the right people on board to implement the plan.

VAT scheme

The scheme announced yesterday is with regard to hoteliers that had signed contracts for this year prior to the budget announced last autumn. VAT on accommodation increased by 2% from 5% to 7%.

The scheme for a partial refund was drawn up following discussions with the Malta Hotels and Restaurants Association.

The government has made available a €1.5 million fund to partially compensate for the increase.

Mr Fenech explained that if the demand exceeds the available funding, operators will get paid pro-rata.

The Parliamentary Secretary responsible for tourism, Mario de Marco said that while other countries like Germany introduced a departure tax, which Malta had removed some years back, the government needed to increase income from the industry without shocking the system.

The VAT increase resulted in some €6 million in revenue since not all tourists book through tour operators.

MHRA president George Micallef expressed satisfaction that some sort of agreement had been reached.

Competition in the tourism industry has become more fierce because tourists are more price conscious, he noted. Late bookings were being experienced for the coming high season and the association’s members still have vacancies even this month.

Some €3.5 to €4 million in contracts had been signed and the reimbursement will therefore cover some 40% of the costs hoteliers are shouldering.

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