Government has refused to provide an update about the state aid request for Air Malta and the financial state of the airline, with the finance ministry saying that it will comment “once the negotiations with the European Commission are over.”

Air Malta has faced financial struggles for years.

In January 2022, the government had announced a restructuring plan for the airline, and had declared that the airline was going to reduce its staff complement by over 400, which amounted to around half of the personnel. This is part of a plan that could very well be the airline's last chance for survival, the finance minister indicated at the time, and came following meetings the airline had been in with the European Commission for the airline to be able to receive state aid funding. Speaking about the changes needed at the time, the minister had said that the company must not be used by politicians and that such decisions in the past led to there being a loss in the airline which it could have done without.  

Since then, the airline has introduced various schemes to reduce the airline’s staff complement and is undergoing a restructuring programme.

Last month, MaltaToday reported that ‘a high ranking government source’ said the government is not hopeful about talks with the European Commission on the prospects of future state aid. It also reported that government is planning to set up an alternative national airline, to replace Air Malta as a contingency plan if the airline cannot be saved. But, such a new airline, it reports, will mean a more streamlined and efficient company run on strictly commercial lines.

With no definitive indication for when the European Commission decision would be announced, The Malta Independent sent questions to the finance ministry, however it’s response effectively means that it is not commenting at this time.

The airline falls under this ministry.

The ministry did not say at what stage the negotiations with the EC over the state aid request are, nor gave any indication as to when a definitive announcement would be made, despite being asked. It was also asked to confirm whether a new airline would be set up should the Commission deny the request, and whether Air Malta can survive without the state aid. This newsroom also asked the finance ministry about Air Malta’s financial situation as compared to last year, as well as what the immediate plans for Air Malta are.

A spokesperson for the ministry responded by simply saying that “The Minister will comment once the negotiations with the European Commission are over.”

Last December, Finance Minister Clyde Caruana had said that the costs for Air Malta cannot remain as they are, and the company needs a number of restructuring decisions.  “We cannot have an airline with eight airplanes, and the costs remain as is,” Caruana had said. He had said that foreign consultants also gave their input into the conditions the airline needs to have to become viable again. Speaking about monetary costs which he did not divulge, Caruana said that those ‘numbers’ are the only ones with which the airline can be saved. “The airline needs a large amount of capital injection to survive, we are talking about hundreds of millions. These are necessary,” Caruana had said.

Caruana has been very vocal on Air Malta’s situation over the years, highlighting non-sensical business practices which were costing the airline millions per year.  He had highlighted certain collective agreement issues, such a clause stating that workers who leave at 55 years of age, and have been pilots with the national airline for more than 25 years, would be paid two-thirds of their salary each month until they retire at 65.