Alitalia losing €500,000 daily… but talks with Air Malta go on
The government yesterday confirmed that it was still pressing ahead with a possible deal over the sale of Air Malta to the Italian national carrier – despite new revelations that Alitalia is currently losing €500,000 a day.
The Italian airline was yesterday hit by a 24-hour strike ordered by the unions of pilots and cabin crew over new working conditions.
Alitalia’s CEO Cramer Ball denounced the action, saying the strike would have a devastating effect on the struggling airline’s balance sheet.
“The union’s action is irresponsible as Alitalia is still in massive financial trouble,” Mr Ball wrote in an e-mail to his staff.
“The airline is currently losing €500,000 a day and the action will cause irreparable financial damage to the airline.”
Despite the admission by its CEO that the Italian airline, which was on the verge of bankruptcy until a few years ago, is not in a position to sustain any industrial action, the Maltese government is still pressing ahead with a possible deal with Alitalia.
“The government confirms that talks with Alitalia are still ongoing,” a spokesman for Tourism Minister Edward Zammit Lewis told the Times of Malta yesterday when asked to comment on the latest revelations.
Mr Ball’s comments followed earlier statements made by Alitalia chairman Luca Cordero di Montezemolo, who described the ongoing talks with the Maltese government as a “no-risk operation” for the Italian carrier.
Describing the possibility of taking over a 49 per cent stake of Malta’s national airline as a sub-zero investment – for which Alitalia would not be forking out a single euro, Mr Montezemolo said Air Malta would offer an opportunity for Alitalia to strengthen its routes with southern Italy and North Africa.
Asked to state whether the government was concerned about talks with a potential strategic partner which was losing half a million euros a day, a government spokeswoman said: “As stated many times, the government will only enter into a strategic partnership if the deal will be beneficial to Air Malta and the tourism industry at large.”
So far the government has not given any details of the business plan presented by Alitalia or the conditions laid down by the Italian airline relating to the acquisition.
The Times of Malta had revealed that the government has already agreed in principle that it would take over all the pending debts on Air Malta’s balance sheet – estimated at over €60 million. The government also agreed to a significant reduction in the current workforce, reaching unpublished separate deals with pilots, cabin crew and engineers.
Each of the three sectors of employees will see their headcount reduced, although no details have been given on how many jobs will be slashed. However, the government guaranteed that none of the current Air Malta staff would be made redundant and that ‘extra workers’ would be offered alternative employment within the public sector or voluntary redundancy schemes.