‘Caution’ is watchword in Air Malta talks

The government has no intention of rushing talks with Alitalia as Malta’s national carrier continues to seek the best deal to ensure a stable future. 

Five months have elapsed since the government announced Alitalia would acquire a 49% stake in Air Malta and, while questions remain about what stage the negotiations have reached, Tourism Minister Edward Zammit Lewis is adamant that the slow pace of talks is “a cautionary measure” to ensure the best deal for the Maltese airline.

“Privatisation of airlines abroad took years… although we have no intention of prolonging the process, and we do want to close in the coming months, we don’t want to hasten the negotiations. This situation requires one to be cautious,” Zammit Lewis told MaltaToday.

“We are not a government that decides on selling a bank overnight and wake up one morning and announce the privatisation.”

Air Malta has been undergoing a restructuring process costing some €230 million ever since it was given the green light for state aid under strict European Commission rules. 

The acquisition comes at an important juncture for Air Malta, where low cost giant Ryanair is close to taking the majority market share of the incoming passenger market to Malta.  

Over the past months, the ministry for tourism and Air Malta’s management engaged in talks with workers’ representatives. The minister described these talks as having been pivotal in reaching agreements over “important guarantees”, which took place after the airline did its costing.

“One should appreciate that Air Malta was kept afloat, along with the guarantee that workers will not be laid off,” he said. “I hope that no one is expecting us to hasten the talks, risking a deal that might be against the interest of Air Malta or the tourism industry.”

Zammit Lewis said Air Malta had no intention of giving up its tourist network and certain red lines – such as workers’ conditions – will not be crossed.

“As a responsible government we are keeping all options open. We have an interest in closing the deal but not at the expense of the sector itself.”

Reiterating that he will come forward once he will have “something to communicate”, Zammit Lewis insisted on ensuring that the process remains transparent.

“The interested parties, including the opposition, will be the first to know. But I do urge the opposition to be more serious in its declarations if it truly is after Air Malta’s success.”

The opposition has in the past proposed the selling of the airline’s shares, later proposing that local investors should contribute to improve the airline’s situation. The minister did not rule out the latter option.

Expert advice by legal firm Camilleri Preziosi showed that Air Malta could not be floated on the stock exchange due to its financial predicament. The financial situation means that Air Malta cannot even qualify for a listing of its shares.