Updated | Fenech: MEP's statement misleading, Scicluna says Air Malta rescue delayed [WATCH]

EU Commissioner for competition Joaquin Alumnia replied to MEP Edward Scicluna's questions as to why the rescue plan was being delayed at an evening hearing of the Committee of Economic and Monetary Affairs (ECON), insisting that "the Maltese authorities are not providing the required information or the restructuring plan submitted was not in agreement with state aid rules".

Under the EU treaties any financial aid given to a company by a national government which breaches the rules of the EU internal market requires approval from the Commission. The government wants to push through a restructuring plan that must generate €130 million for Air Malta in a revenue to pay off €130 in restructuring costs.

Scicluna said in a statement that in a report on the Air Malta case sent by the Commission to the foreign minister in January 2012, the Commission expressed doubts about the government plan describing it as "too optimistic" with regard to its market share, plans to return to profit and overall viability. It added that the government was yet to provide a detailed impact assessment under various scenarios.

"Almunia insisted that negotiations need to be continued as 'we cannot impose our own ideas on the restructuring plan' and national authorities need to submit additional information in a bid to reach and agreement," Scicluna said.

Scicluna said that while the government is accusing the EU Commission of holding the back the deal, Almunia insists that it is the government that is the "road-block to reform". 

"Maltese taxpayers are rightly perplexed that they see billions being provided by the EU to bailout banks while at the same time it is taking ages for the Commission to give the go ahead for the government to restructure our national airline using our own money.

"Air Malta is vitally important to our economy. We cannot have a situation where its future is hanging in the wind for months and years because the government has neglecting its duties," Scicluna said.

In a statement, finance minister Tonio Fenech said he failed to understand why Scicluna had ignored the very comments by Almunia during the hearing of the ECON committee.

"In fact, the Commissioner confirmed during the hearing that the Commission has been 'working on the restructuring of Air Malta since a long time; hopefully we are close to the end'. This opening remark by the Commissioner was not alluded to in any way in the MEP's statement, which is unfortunate and misleading," Fenech said.

"The accusation that government has, in any way, delayed the process through inaction is ludicrous; quite to the contrary, the complex negotiations with the European Commission on Air Malta's restructuring have progressed well and it is expected that by the end of the process initiated by the Commission, the efficiency with which Government handled the Air Malta case will be evident."

Fenech said that out of the seven state aid cases dealing with European airlines in the past seven years, all but one case would have been concluded at a quicker pace, namely the Austrian Airlines case.

"All other State aid investigations launched since 2006, namely those into the restructuring of Cyprus Airways, Alitalia, Olympic Airways, Malev and Czech Airlines took at least a year to complete. In the latter case, the Commission investigation was launched a whole year prior to that launched into Air Malta's restructuring, and is still pending."

Fenech added that it was important to keep in mind that the Commission has often exercised its right to reject a restructuring plan, throwing airlines into complete disarray.

"In this context, the government is determined to forge ahead with ensuring that the best possible outcome for Air Malta is secured, thereby guaranteeing a viable national airline well into the future.

"MEP Scicluna should be aware of the fact that such competition cases, particularly in the sensitive sector of aviation, take longer than just a few months to complete."

Earlier Tuesday, the Airline Pilots Association said it had resolved during an extraordinary general meeting that Air Malta management was not being transparent in the ongoing restructuring process and about the company's future plans in returning the company to a sustainable position.

"Some of the points raised on which ALPA is requesting more details are the following: cargo pricing; Air Malta's head office move to Sky Parks; MIA charges; management and consultants fees; latest employee recruitment and also information on the major suppliers' contract negotiations. ALPA hopes that in the near future Air Malta will produce the requested documentation and information."