Air Malta denies airport slots are for sale

Air Malta has rebutted "allegations" reported in The Times in a leak of a letter from the European Commission to the airline, that it is selling slots at primary airports including at

London's Heathrow and Gatwick as part of its restructuring plan.

"Air Malta's airport slots at primary airports including Heathrow and Gatwick are not for sale," Air Malta chief exective Peter Davies said.

"The sale of slots is not even mentioned in the restructuring plan presented to the EU Commission and this option is not being considered. Both destinations continue to be key strategic routes for Air Malta."

A particular revelation from the still unpublished 26-page letter from EU Competition Commissioner Joaquin Almunia is that Air Malta's plan to reduce the current fleet of 12 to 10 planes and overhaul its route strategy - which are expected to generate €21 million in savings - will see the airline stop operations to various routes, and sell slots in major airports, including London.

Davies said the EU Commission's strict restructuring guidelines dictate that an airline which is a beneficiary of state aid, needs to take 'compensatory measures' that can take the form of divestiture of assets, a reduction in capacity or market presence or a reduction of entry barriers.

"Air Malta's restructuring plan refers to release of slots at foreign coordinated airports in line with reduced flight capacity and represents additional compensatory measures offered to the benefit of other market participants. In this context only, last summer, one flight rotation to London Heathrow was reduced on the unpopular Saturday evening flight. A double daily service is still however being offered on Heathrow whilst a daily service to Gatwick has remained unchanged.

Overall, in line with the EU's 'compensatory measures' requirement, the plan will see Air Malta reduce overall capacity by 20.2 per cent throughout its network. 10 per cent reduction in capacity has already been achieved last summer between April and October. Another 10 percent reduction will be achieved this year.

Air Malta's CEO however highlighted that the reduction in capacity last summer did not affect passenger numbers.

"Last summer we managed to increase our seat factor by 10 per cent, utilising our inventory much better. This result has offset the 10% reduction in capacity and we managed to carry 1.75 million passengers - almost the same number of passengers, with less flights and reduced costs. This gives us hope that our efforts are yielding results and we can achieve better utilisation of resources by working more efficiently and effectively," Davies said.

"Our plan, which adheres to the strict Commission's guidelines on state aid aims at finding the right balance between the Commission's requests, the need for the airline to operate on a sound commercial footing and to minimise any impact on local tourism operators."

"The airline must survive because of its fundamental link to the island's tourism industry. Unless every stakeholder in the tourism chain works constructively together, it will be difficult to steer Air Malta to a less turbulent future," Davies said.