Ongoing discussions with a strategic partner set to rescue the ailing Air Malta include increasing the airline’s fleet and opening new routes to source markets such as Italy and Germany, Tourism Minister Edward Zammit Lewis told this newspaper.
Last week, the Times of Malta reported that Etihad Airways was expected to have a significant stake in the national carrier. Dr Zammit Lewis could not confirm the airline’s identity, citing confidentiality, but said that discussions were at an advanced stage.
“I don’t like dragging my feet. Were it up to us, the deal would have been struck yesterday rather than tomorrow. But it takes two to tango and obviously the other party must be satisfied with the deal as well.”
Asked whether all the employees of Air Malta would be absorbed by the strategic partner, the minister said the issue was a challenge being faced on the negotiation table.
“It is a challenge – and not only for the employees to remain in their current positions but to also offer them more opportunities.
“That’s all I can say for the time being, but I want to stress that everything we’re doingcentres on offering employees a future and further opportunities.”
The current model that the national carrier is based on needed to change, as it would not lead to growth, Dr Zammit Lewis continued, adding that it was not enough for the airline to break even.
“We cannot remain with the status quo as that would leave us with an airline which only operates seven to nine aircraft, depending on the season. This is not acceptable.
“In order for the airline to grow, we require a strategic partner that can provide a network, meaning more routes and therefore more work. And that is where we are heading.”
Were it up to us, the deal would have been struck yesterday rather than tomorrow. But it takes two to tango
The ministry had a route development policy, he added, with people engaged in identifying lucrative new routes which could be operated by Air Malta and, if that was not possible, by private airlines.
Dr Zammit Lewis said he wished to strengthen the main source markets by opening new routes to Germany and Italy as well as to secondary markets such as Scandinavia, adding that Malta was not tapping the Nordic countries’ full potential.
“These issues are all part of the recipe we are negotiating with the strategic partner.”
The possible stake purchase, which still requires regulatory approval, comes as the European Commission raised concerns over how Arabian Gulf carriers operate in Europe.
Publishing a new aviation strategy earlier this month, the Commission called for comprehensive agreements between the EU and states forming part of the Gulf Cooperation Council based on common rules and transparency.
This could pose a potential threat to Gulf carriers who fear it could curb their expansion, as some of their European rivals accuse them of benefiting from unfair state subsidies and of gaining undue power over European airlines through minority holdings, effectively controlling the carriers.
Etihad Airways holds equity investments in Air Berlin, Air Seychelles, Virgin Australia, Air Serbia, Jet Airways and Alitalia.
Etihad Airways purchased a 49 per cent stake in Alitalia in August, 2014.
The final agreement had been delayed due to labour objections to the approximately 1,635 job cuts Etihad proposed in order to bring the Italian carrier back to profit.
Video: Matthew Mirabelli