There is “no conflict of interest” in the government holding shares in both Air Malta and Malta Air, Tourism Minister Konrad Mizzi told The Malta Independent on Tuesday.

Asked by this newsroom whether the fact that the government held a share in the new private airline Malta Air while still holding a majority share in national air carrier Air Malta constituted a conflict of interest, Mizzi said that the he did not see that there is a conflict of interest, noting that the government’s golden share in Malta Air is not for the government to “butt in” to the operations of the airline or give it strategic direction, but it is to protect Malta’s interests.

He said that the government holds almost all of the shares in Air Malta and that the line of thinking is to invest in the airline with a new fleet and new destinations away from Malta’s immediate shores.

Mizzi reiterated his position against the demands of the Airline Pilots Association, saying that for the national airline to move forward everyone has to cooperate. He said that he was satisfied to see that the Chamber of Commerce had asked the pilots to cooperate and said that the government cannot give a guarantee to the pilots or any other employee about an early retirement scheme of €700,000 if the company ceases to exist. “It is not on”, Mizzi said.

“I suggest that there is already almost an agreement between the pilots and Air Malta which both parties should sit round the table, agree upon it without government guarantees and work based on that”, he said.

The Association had demanded that the government guarantees a €700,000 early retirement scheme at the age of 55 in the case that the national airline goes bankrupt, and resorted to industrial action earlier this week which saw all Air Malta flights be delayed by 30 minutes.  The industrial action was temporarily withdrawn on Monday after the courts upheld an injunction filed by the government ahead of a hearing on the case this coming Friday.

Asked which airline the government would favour if there was a common opportunity for a new route or market, Mizzi said that there is no question of favouritism because it is an open market.

He said that Ryanair – who own and operate Malta Air – focus primarily on low cost airports with low charges, while Air Malta focuses on main city airports such as London’s Heathrow Airport.  Mizzi admitted that there are markets, such as Rome, Milan, and Sicily, that the two airlines will compete, but said that these were minimal.

However, Mizzi said, the government wanted to see both airlines grow and complement each other, adding that Malta Air would grow into low cost leisure destinations around Europe and North Africa, while Air Malta would continue to grow in the Middle East, Europe, North Africa and Asia.

Malta Air was launched on 11 June, with the government holding a golden share in the airline, and will fly to over 60 destinations in 21 countries from Malta, essentially taking over the routes that are currently operated by low-cost airline Ryanair.  The airline will, within the next three years, have a fleet of ten Boeing 737 aircraft based in Malta – an investment to the tune of $1 billion, will employ 350 people within the next three years, and will see 50 Ryanair aircraft be registered in Malta’s jurisdiction.

Many raised concerns over the impact that this new airline could have on the national carrier, but Prime Minister Joseph Muscat and Konrad Mizzi himself have sought to alleviate those concerns, saying that the aim was for the two airlines to complement each other rather than compete against each other.