Malta-Gozo air transport to be liberalised

The government has confirmed that Air Malta's financial position is "precarious" and that it has lost Lm16 million in its last financial year which ended last July.

Earlier this year, The Times had reported that Air Malta had made a significant loss in the previous financial year.

The government said that in the coming days the department of civil aviation would be issuing a call for tenders for private companies wishing to operate the air service between Malta and Gozo.

The government said it was aware that various companies seemed to be interested to operate the service and, in line with its policy of liberalisation and in conformity with EU requisites, it will be liberalising the market.

The government said the call for tenders will be made in Malta and abroad for companies interested in operating this service to register their interest. This will be followed by a detailed evaluation exercise.

It said the service was being operated by Air Malta's subsidiary Malta Air Charter, which has accumulated a loss of Lm1.4 million on this service.

The government said that due to new investment and recurrent expenses, Air Malta's subsidiary would continue to lose Lm1.5 million per year.

"This is because Air Malta is not geared to operate this type of service and therefore it does not benefit from economies of scale on this operation."

The government said the new board was working hard to focus the company's operations on the group's core business in order to become more competitive in a globalised market.

"It is in this context that Air Malta has to consider whether it should compete to operate the service between Malta and Gozo."

The government said Malta Air Charter will continue to operate the service until October 31 of next year. Such time was required in order for new operators to make the necessary operational and technical arrangements.