A European Commission request for independent valuations of property owned by Air Malta was one of the technical issues which had to be addressed before submitting the final restructuring plan to Brussels, Finance Minister Tonio Fenech said yesterday.

Reiterating a denial that the government accused the Commission of delaying the airline’s restructuring, Mr Fenech said the process on the final version of the plan involved a number of technical meetings between the government and the Commission.

The draft plan was submitted to the European Commission in May.

“The formal plan will only be submitted once, and it will be the one that the commission will be accepting because after it is published it can be challenged by other airlines,” he said. Until then, the plan “is coming and going... it is normal procedure”.

Mr Fenech said a number of changes had to be made, upon the commission’s request, “because of concerns on how the restructuring plan will be financed”.

“There were difficulties, including the sale of property that Air Malta has because the Commission wanted independent valuations to ensure that the valuations we presented were not inflated. These are the kind of technicalities which have to be addressed,” he said when asked what stage the restructuring plan had reached.

On Monday evening, during a television programme on Labour station, One, European Commissioner John Dalli said it was unfair to blame the Commission for not yet replying to the government’s plans on Air Malta’s restructuring. In reaction, the Finance Ministry said it had never accused the Commission of “not dealing with the Air Malta restructuring aid application in the most expeditious way possible”.

“The European Commission and the government are working hand in hand to publish a restructuring plan which respects all EU rules and which will guarantee a future for Air Malta,” Mr Fenech said.

Asked for a timeline, Mr Fenech said the process was nearing the end and the report will be formally presented to the Commission “within a few weeks”.

Airline’s hard landing

• Set up in March 1973, Air Malta started flying operations with two wet-leased Boeing 720Bs from Pakistan International Airline.

• It began with scheduled services to London, Birmingham, Manchester, Rome, Frankfurt, Paris and Tripoli and now services 35 countries.

• Problems began to emerge in the beginning of the new century with Air Malta, like the rest of the global airline industry, facing difficulties due to depressed passenger growth trends, a drastic increase of operating costs and a depletion of its cash reserves.

• In May 2004, Air Malta signed a hard-fought three-year Rescue Plan Agreement with the four unions representing the airline’s employees in a bid to solve its difficult financial position.

• This plan was important but not enough, forcing the government to request the European Commission to authorise a loan facility worth €52 million in line with EU state aid rules. The Commission approved the measure temporarily until taking a decision on the restructuring plan which is yet to be submitted.

• The airline’s new Chief Executive, Peter Davies, plans to reduce the airline’s workforce and cut costs by some €30 million. It will shed more than 500 of its workers.

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