Alitalia proposed that Air Malta pay an annual management fee as part of a deal to take over a minority shareholding in the Maltese national carrier, civil aviation industry sources said.
The sources told the Times of Malta the government had already accepted in principle the payment of such a fee. However, the value has yet to be determined.
However, when asked about this, a spokeswoman for the Tourism Ministry said no agreement had been reached. “The government has repeated many times that an agreement with Alitalia will only be signed if it is beneficial for the airline, tourism industry and the economy at large,” she said.
“As negotiations continue, both sides are discussing what should Air Malta pay on an annual basis so the Italian carrier would take over the daily management and operations of the Maltese airline. So far, a sum in the region of €4 million a year has been mentioned but the Maltese government has not yet agreed to the figure,” the sources said.
They said the idea was that the management fee paid by Air Malta would be converted into equity. “The fee will be paid to the Italians in kind, in the form of shares. This way, the Italians will not have to make any capital investment in the Maltese airline,” the sources added.
Alitalia, which, according to the latest declarations by its top management, is losing about €500,000 daily, indicated from the outset it was not willing to make any investments in the Maltese air carrier. Its chairman, Luca Cordero de Montezemolo, publicly declared the Italian carrier would not invest a single euro in Air Malta, saying the deal would be a sub-zero risk for Alitalia.
Such declarations, made at the start of the official negotiations with Alitalia, did not go down well with Maltese negotiators even if the talks continued, the sources noted.
Following preliminary discussions with Alitalia and Etihad, last May the government announced the signing of a memorandum of understanding with Alitalia to finalise the sale of a 49 per cent stake in the airline.
The memorandum specified that negotiations were to be wrapped up by the end of August, however, that did not happen and both Alitalia and the government have remained tight-lipped about the matter.
Prime Minister Joseph Muscat recently spoke for the first time of a scenario whereby a deal with Alitalia would not be reached. This followed intense criticism by stakeholders, particularly within the tourism industry, that such a deal with Alitalia did not make sense.
The government has accepted a number of demands by the Italian side, including a significant reduction of staff, the formation of a new company to start with a clean balance sheet and the takeover of all liabilities – over €60 million in debts – by the Maltese government.
According to a draft business plan, which has yet to be published, Air Malta would cut a number of routes to Europe and increase others to North Africa and the Middle East, the sources said. The deal, if concluded, will need the green light of the European Commission.