Dubai: Malta’s government will shut down loss-making airline Air Malta in March next year and immediately replace it with another flag carrier after the European Union denied state aid for the current carrier.
Malta’s Prime Minister Robert Abela said the new airline will retain the Air Malta name and commence operations on March 31, 2024. He said the airline will continue to operate Air Malta’s current mix of eight leased Airbus A320 aircraft. Air Malta closes down after 50 years of operations.
UAE-based aviation, travel, and tourism experts Knighthood Global have been tasked with creating the business plan for the new airline. They have commenced a thorough planning phase and are engaging in intricate negotiations with the EU. This comes after two decades of unsuccessful efforts to revive and reposition Air Malta.
James Hogan, Chairman of Knighthood Global, said, “This is a great day for Malta and its aviation industry. We are very proud to have supported the plan’s development, which has now been ratified by the Maltese parliament, marking a new milestone in the aviation history in Malta.”
Hogan added, “In a complex process of strategic business planning and negotiations, we worked collaboratively with David Curmi, Executive Chairman of Air Malta, the government, and the European Commission to shape a new future-proof airline.”
Unprofitable routes to be discontinued
The new airline’s five-year business plan is based around two key drivers – a robust network of key destinations and a modern, fuel-efficient fleet.
Meanwhile, Abela assured that the transition would be seamless and services would not be affected, although unprofitable routes would be discontinued. Air Malta operated to 37 destinations in 2019. The new airline will run flights to 17 destinations.
Booked Air Malta passengers will be offered a refund or rebooking with the new airline. Air Malta workers will be re-employed by the new airline as well.
Finance Minister Clyde Caruana said that while the government would remain the majority shareholder in Air Malta, it planned to issue shares or reach a strategic partnership with some other airline. “That will be good to ensure good governance, but the government will retain control,” he said. He expects the airline to become more efficient and return to profit in two years.
Air Malta was formed in 1973 and started services in 1974, flying to several European and North African countries.
It faced tough competition from leaner, more efficient low-cost airlines and the European Commission authorised state aid in 2012 after losses mounted.
A stuttering recovery eventually failed, and the government asked the commission to authorise a fresh injection of almost 300 million euros ($315 million) in 2021 as the airline suffered a new blow when the COVID crisis severely curtailed air travel.
With inputs from Reuters