The final decision on the multi-million euro restructuring plan for Air Malta was expected to be delayed by at least another four months, sources close to the European Commission in Brussels said.
When the company presented its first plan in May, the Commission was expected to come out with its final decision by the end of this month. However, two important factors have now delayed the process and the decision is not expected to be taken before April.
“The Commission has asked for clarifications and changes to the original plan submitted in May,” said a senior EU official. This has involved the gathering of new data, including a fresh evaluation of some of Air Malta’s assets, which, as expected, has taken its time.
“Secondly, the Commission has decided to take the longer route to arrive to its final decision and will be first publishing its preliminary assessment and inviting comments and objections from all interested parties,” the official said.
It is expected to publish its preliminary decision in the EU’s official journal probably by the end of this year. Once this is done, objectors and interested parties will have a month to make comments and the Maltese authorities will be asked once again to respond.
The preliminary published decision would leave out sensitive information that might prejudice the airline’s commercial interests.
It will only be at the end of this long process, expected to take until the end of March, that the Commission will be taking a final decision.
In case of a green light, Air Malta will have five years to put its financial house in order and start making money. Should it fail, no further state assistance would be allowed and the national airline will probably have to fold.
According to EU state aid rules, the company will also have to return to the government the €52 million in rescue aid originally lent for its survival in November 2010.
On the other hand, the government will be allowed to inject fresh capital into the airline to strengthen its financial base.
Meanwhile, Brussels is expecting the airline to continue with its restructuring plan, including the shedding of about 500 workers from its workforce.
The Commission official said that Brussels noted the recent developments on the agreement between the company and unions on the voluntary redundancy schemes. It is urging the company to move faster in this area as this is considered crucial for the airline’s recovery.