The government would consider alternatives if negotiations with Alitalia on the sale of a major stake in Air Malta fell through, Prime Minister Joseph Muscat said yesterday.

He was speaking during a meeting with the Malta Hotels and Restaurants Association, whose president Tony Zahra expressed concerns that the national airline would no longer be carrying the most passengers in and out of Malta by next year.

The MHRA was presenting Dr Muscat with a series of economic and social proposals ahead of this month’s Budget.

“This is our national airline. It is what we have and we must safeguard it,” Mr Zahra said, to which Dr Muscat replied that he would be seeking other options if discussions with Alitalia, which is 49 per cent owned by the Abu Dhabi airline Etihad, failed.

This is our national airline. It is what we have and we must safeguard it

“There are no ties with the deal currently on the table. If a better offer comes through or if negotiations are not to our advantage, we will go for another alternative,” Dr Muscat said.

Nearly half a year has passed since the government announced Alitalia would be taking up a 49 per cent stake in Air Malta. The future of the deal, however, is subject to public and media speculation.

Tourism Minister Edward Zammit Lewis meanwhile has insisted that the government was simply being cautious by not rushing into any deals.

“Privatisation deals for foreign airlines have taken years of negotiations and talks in other countries,” he had said.

Dr Zammit Lewis had also said that although the government had no intention of prolonging the process, in fact it wanted to seal the deal in the coming months, “we don’t want to hasten the negotiations. This situation requires one to be cautious.”

Air Malta was given the green light for State aid under strict European Commission rules as long as it agreed to undergo a restructuring process to the tune of around €230 million since 2012.

The potential acquisition comes at an important juncture for the airline, as low-cost giant Ryanair is close to taking the majority market share of the incoming passenger market to Malta.

The PN has suggested that local investors should contribute to improve the airline’s situation. The minister did not rule out this option.

Back in August this newspaper reported how Air Malta would cease flying to nearly a third of its current European destinations and instead increase the frequency of its flights to North Africa and the Middle East, under a business plan drawn up by Alitalia.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.