Air Malta’s stakeholders have every reason to be worried, not so much because they do not know what the future of the national airline is, but because they feel that signals coming from the shareholders and management are confusing if not outright distressing. Air Malta’s future must simply not be determined by stealth.

The airline industry in Europe suffers from substantial overcapacity and few airlines are making any money. According to Oliviero Baccelli, an aviation economist teaching at the Bocconi University, Etihad that owns 49 per cent of Alitalia is going to suffer a decline in business “as they have found a European aviation market that is more complex than originally thought”.

Alitalia is not doing much better and recently lost three directors who resigned last November. The Italian airline is losing about €500,000 a day. It is constantly reviewing its strategy with the latest attempt, according to the specialised aviation media, being to focus on long-haul flights as the overcapacity in Europe is killing the viability of most airlines.

The little that is being revealed about developments in Air Malta’s restructuring comes either in the form of enigmatic statements by the government or through brief, but meaningful, comments made by the European Commissioner for Competition. In this atmosphere dominated by lack of clear communication speculation about what may be going on in the corridors of power in Castille, the Ministry for Tourism, and the boardroom of Air Malta overshadows the realities that the airline is facing.

For instance, no satisfactory information has been given by Air Malta as the why the 2015 results were not published and the annual general meeting postponed to an undetermined date. When asked by this newspaper about why the AGM of the company for 2015 has still not been held the minister failed to give a clear answer thereby raising justifiable doubts about the airline’s financial health.

It is almost certain that negotiations with Alitalia and even Etihad have stalled, if not abandoned completely. These airlines have problems of their own and it is unlikely that concluding a deal with Air Malta is high on their strategic priority list.

The only thing that is worryingly reliable is the statement made by Margrethe Vestager, EU Competition Commissioner who said: “In view of the previous restructuring aid to Air Malta approved in 2012, the airline is currently not eligible to receive further rescue or restructuring aid.”

Claims by a Cypriot socialist MEP, Costas Mavrides, that the Maltese government is planning to absorb Air Malta’s debt and give ‘secret subsidies’ are equally worrying. One just hopes that these allegations are unfounded and that banks and government entities are not used to act as a medium to grant State aid through the back door as some other distressed airlines have done in the past.

While the government and the management of Air Malta try to project the impression that the airline is on ‘business as usual’ mode, the distressing signals that stakeholders are seeing are indeed worrying. The cancellation of important routes like that of Frankfurt are just one symptom of distress.

What is certain is that the ‘one-time-last-time’ State aid principle is unlikely to be wavered by the EU to give yet another breathing space to Air Malta.

The government is obliged to take the public in its confidence and reveal with urgency its plans for the airline. Management by stealth is not a sensible option.

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