The Nationalist Party this morning reiterated its call for the government to consider the option of greater Maltese investment and shareholding as a means to safeguard Air Malta’s future.

Addressing a news conference, shadow minister Claudio Grech outlined the details of the party’s proposal for the viability of the Maltese carrier.

“The worst thing that can happen is to give up at this stage. The situation is not all gloom and doom, as up to last year Air Malta’s operating loss was of just €4 million. The most worrying challenge is the harsh competition in the airline industry rather than Air Malta’s debt,” he said.

Last May the government signed a Memorandum of Understanding with Alitalia, paving the way for talks which would see the Italian carrier acquiring a 49 per cent stake in the airline.

Claudio Grech speaking this morning with the shadow minister for tourism, Antoine Borg (left) and Opposition deputy whip Censu Galea.

Though negotiations were originally planned to be wrapped up by the end of last July, talks have stalled and no agreement is in sight yet. The Prime Minister has hinted that the talks may fail and the government will look elsewhere.

While backing efforts to find a strategic partner, Mr Grech said that this move does not necessarily need to translate into the acquisition of Air Malta shares.  He noted that taxpayers had already provided €230 million in assistance to the airline as a result of the restructuring programme agreed with Brussels.

Under the PN’s proposal, the government would shoulder Air Malta’s past liabilities of about €70 million and introduce a new shareholding framework over a three-year period.

The first phase would involve investments from institutions and private enterprises. However, the PN is insisting that no private shareholder would be allowed to have more than 10 per cent of shares and must be bound by a lock-in period so as to avoid speculation.

In the second year, share options would be issues to Air Malta employees and the final phase, in the third year would involve issuing shares to the public in line with the listing rules set by the financial watchdog.

Once the airline would have secured the sufficient capital, the next step would be to get the required finances from local sources or abroad to invest in better efficiency, IT and strengthen its position in the local market.

In his appeal Mr Grech urged the government to take its proposals on board, saying this was an important test for all the country, as hundreds of jobs were at stake. 

This proposal had been floated last May by Opposition leader Simon Busuttil, but the government had shot it down saying such a model was illegal. Reports had said that this position was based on a study carried out by Camilleri Preziosi advocates.

Asked for his reaction Mr Grech said this study was never presented to the Opposition and he expressed his willingness to discuss their proposal with the law firm. However, he pointed out that the PN’s call to issue public shares was based on the assumption that the government would first absorb its past liabilities of around €70 million.

Commenting on the declaration made in court last July, by an Air Malta lawyer who said the company would go down if no strategic partner wold be found by this month, the PN spokesman expressed his disagreement with such statement. 

Former government blamed

In a reaction, the Tourism Ministry blamed the former Nationalist government for Air Malta’s problems and said the PN had no solution for them.

It said that Mr Grech had today confirmed what the government had been saying – that shares cannot be offered to the public before two to three years. This contradicted when the leader of the opposition said previously.

The ministry did not refer directly to the talks with Alitalia, but said that all options, including local investment, remained on the table.

The government would take the appropriate decisions in the interests of the country and the airline. For a start, it said, it was carrying out reforms which should have been made years ago, and seeking a strategic partner.