MEP Louis Grech writes to Almunia to ‘allow granting of vital support’ to Air Malta

Grech, who served as Air Malta chairman under both Labour and PN administrations between 1996 and 2003, has called into question the European Commission's decision for having turned down the Maltese government’s proposed capital injection to enable the airline to rebuild its capital resources.

"I am at a loss as to why the Commission turned down the proposal EU approval of a capital injection... The ultimate aim was to return the airline to profitability and enable it to operate competitively in the market without any State support, as has been the case so far,” Louis Grech said.

Grech has formally written to the European Commission Vice-President Joaquin Almunia, to stress the need for his ‘consideration’ of an aid package that is in full respect of EU state aid rules and that “ensures vital support” for the airline.

He blamed “hard times as a result of a new, harshly competitive environment” as the reason for Air Malta’s current crisis, and explained that while such circumstances have broken ‘many an airline’, Air Malta has used its internal resources – not taxpayers' money or subsidies - as has been the case with a number of EU carriers.

According to Louis Grech, the main problems affecting Air Malta’s current performance are tied to hiked fuel prices, fluctuating exchange rates, the economic recession and cut-throat competition.

Grech stressed that Air Malta has not been the recipient of any State Aid, not only since EU membership, but even before that.

“On the contrary, it has been Air Malta which has subsidized, and indeed continues to subsidise, tourism and air transport development through its marketing activities, with an annual expenditure of around 25 million.

“It is rather ironic that it is exactly this development which has permitted low-cost airlines to find fertile ground for their own forays into the market,” Grech said.

While stressing that Air Malta is fundamental to Malta’s communications infrastructure given its peripheral island status, throughout its history, Air Malta has provided and still provides service on routes and airports that are either not served  at all, or are not adequately served, rendering a much needed public service, even by low-cost airlines benefitting from Maltese government marketing support,” he said.

In his letter, Louis Grech stressed on Air Malta’s role as the provider of the “best, expedient and most practical means of transport for the ordinary Maltese citizen wishing to leave the island, not to mention its crucial services during the off-peak tourist season when other airlines withdraw capacity completely.

While also mentioning the vital role Air Malta plays for the Maltese manufacturing industry, Louis Grech stressed that “were it not for Air Malta, the Maltese economy would have faced severe crises whenever other foreign airlines, including legacy ones, decided at short notice to withdraw from the Maltese market.”