Air Malta and Alitalia are still far from reaching convergence on a possible partnership, the Times of Malta has learnt.

The national airline had originally planned to wrap up a deal by the end of August.

The Tourism Ministry, which is spearheading negotiations, is tight-lipped on what caused the delay and would only confirm that talks were still under way.

“The Tourism Ministry confirms that talks with the strategic partner are still ongoing since the government’s priority is to secure the best possible deal which assures a sustainable solution for Air Malta,” a spokeswoman said when asked
why was the self-imposed deadline not met.

She noted that, in the meantime, agreements had been struck with the airline’s pilots, cabin crew members and engineers. Talks with the General Workers’ Union, which represents other workers, are expected to continue in the coming days.

No new date is known to have been set for the conclusions of the talks with Alitalia but civil aviation industry sources said a board meeting was scheduled for September 23 when the issue was likely to be discussed.

The unions representing the workers have also been summoned for a meeting on the same day.

“There’s still a lot to be done before a deal is struck. They’re still far apart and there’s no convergence unless one of the two backs off,” the sources said.

The government signed a memorandum of understanding with Alitalia last April aimed at roping in the Italian carrier as a strategic partner.

Alitalia is interested in buying a 49 per cent stake in Air Malta but, according to the sources, was insisting on a leaner company, with far
fewer employees.

Alitalia is 49 per cent owned by Etihad of the United Arab Emirates and talks are known to have been held with Etihad’s top brass too.

The business plan is expected to map out the future of Air Malta after the expiry of a five-year restructuring programme that failed to make the
airline profitable.

The government believes the strategic partner can help turn the airline around and enable it to grow.

So far, the sources said, the two sides agreed in principle to set up a new company so the partnership could start with a fresh, debt-free operation.

The government is willing to absorb the debts and the surplus employees.

It has never disclosed the airline’s current state of play until a company lawyer admitted in court that, despite the five-year restructuring programme, it still had about €66 million in outstanding debts.

In order to have a clear slate, Malta would require the green light of the European Commission in view of strict EU state aid rules. Since the start of the restructuring programme in 2011, the government has pumped about €200 million into the airline to put it back into the black. During the last year
of the programme, Air Malta had to register a loss of below €4 million.

The airline’s latest financial results have not been published yet.