The government is expected to present its final four-year Air Malta restructuring plan to the European Commission later this week, sources close to the European Commission have told The Sunday Times.

The plan is expected to detail radical changes at the loss-making national airline, including a total revamp of its operations as well as bold cost cutting, including the reduction of some 600 jobs.

Sources said the plan may also include a recapitalisation of the airline.

Last November, the Commission gave the government temporary permission to grant a loan of €52 million to Air Malta to ensure the airline could stay afloat.

This was subject to the government presenting a restructuring plan to the Commission within six months, which will then need to be approved by Brussels.

Commission sources said that “although the plan is expected to reach Brussels by the end of the week, the Commission has already been holding informal discussions with the Maltese authorities over the past months and is very conscious of the main thrusts to be included in the restructuring plan”.

“Malta has not asked for any extension in order to present its plan,” Commission sources said, dismissing some media reports. “We have been following the discussions held in Malta in detail and are not expecting any surprises,” the sources said.

Following the presentation of the restructuring plan to the Commission, the EU executive will start the laborious process of analysing the report and taking a formal decision on whether Malta can continue to provide state aid to the national airline to avoid bankruptcy.

Though no deadline has been set, the sources said: “We are conscious of the urgency and importance this decision will have on the future of the ­company and Malta’s tourism and so we do not expect it will take a long time to reach a final decision.”

EU rules stipulate that state aid to Air Malta can only be given once. If the Commission is not satisfied with the plan, it can ask the Maltese authorities to make amendments.

Should the Commission remain unsatisfied with the submissions, Air Malta will have to reimburse the loan at once, which would mean the ­airline would effectively be defunct.

According to the Commission’s preliminary decision, published last December, Air Malta has been in the red since at least 2003 but the situation took a turn for the worse in 2009 due to rising fuel costs and the loss of market share to low cost airlines.

Air Malta currently employs 1,512 staff and its collapse may also impact another 2,672 workers employed with various suppliers, according to the Commission’s analyses.