Air Malta reform deadline pushed back to end of January

A government spokesman said “Work on the restructuring plan has not yet been concluded although significant ground has been gained and the work has reached very advanced stages.”

Government had set itself the target of completing the plan to be submitted to the European Commission by early January. However, this has been pushed back a few weeks.

However, the same newspaper reports that government is still ahead of its EU deadline for the plan, and has plenty of time to discuss the reform plan with the Commission.

If the Commission is not satisfied with the proposed reform, then it may pull the plug on the urgent rescue aid it granted Air Malta, which suffered €31 million in losses in 2009, and is expected to record even worse loses in 2010.

The restructuring plan is one condition attached to the Commission’s approval of €52 million in emergency aid to keep the national airline afloat.

The plan is in the hands of Ernst & Young senior officials, led by Alan Hudson and Robert Palmer, former Easy Jet group financial controller, who is overseeing the airline’s commercial operations. Certain Air Malta management and technical staff relevant to the reform plan are also actively involved.

“This is the biggest review of the airline’s operations. The team are going into a detailed analysis of Air Malta’s cost structure and expenditure right down to the last cent being spent, examining its existing business model, its needs and revenue streams,” a source close to the airline said.

Should the airline collapse, 1,512 staff members will be unemployed and a further 2,672 workers employed with various suppliers will be affected, the Commission had said.