The government is committed to identify solutions to improve Air Malta's difficult financial situation and structural reform is to continue, Finance Minister Tonio Fenech told The Times Business yesterday.

Media reports over the company's dire finances resurfaced over the past few days as the national carrier continues to present the government with a challenging balancing act.

The company is reportedly several million euros in debt as rising fuel prices compound the situation. Air Malta employs just under 2,000 people.

"While the restructuring process initiated a few years back resulted in significant cost reduction, it did not succeed in fully addressing the challenging issue of sustainability," the minister conceded.

"The airline faces challenges like most airlines across the world. The government considers Air Malta a strategic national asset which operates strategic services and structural reform will continue. We will continue to work to make the company more profitable in the future," he said.

Asked about reports that chairman Lawrence Zammit planned to resign early next year, Mr Fenech said the government's trust in Mr Zammit was "unquestioned".

Air Malta has just registered one million online ticket sales and recently announced increased traffic growth on its scheduled services for October of 4.4 per cent over last year's record for the same month. Aggressive pricing means average fares are lower.

The airline is to increase its flights to Germany, France and Italy by 10 per cent next year. There will be nine new weekly flights to these markets with a capacity to carry 75,000 more tourists to Malta. New routes to Turin and Genoa will be operated next summer.