Finance Minister Tonio Fenech was yesterday unruffled by low-cost airlines’ plans to contest the state aid granted to Air Malta to save it from the prospect of bankruptcy.

“I’m not surprised by their objection. Every company in the EU market will seek to protect its interests,” Mr Fenech told The Sunday Times.

He said that while airlines had every right to object to the European Commission’s decision, the Commission had assessed its position extensively before allowing the government to go ahead with the aid.

Various conditions have been placed on Malta and this was simply an “arm’s length loan” as part of a restructuring process, he said.

Asked if it was fair for low-cost airlines to be challenging this assistance when they had also received continuous support, Mr Fenech replied that this was “not a question of fairness but legality”.

He added that the government’s support for low-cost carriers was also carried out within the accepted European framework and guidelines.

The Times reported yesterday that the Brussels-based European Low Fares Airline Association feared the state aid would hamper the development of fair competition. But confronted by the fact that low-cost airlines also received handsome subsidies, the association said it was not aware of any “illegal” state aid.

Earlier in the week, the Commission authorised a €52 million loan facility to keep Air Malta’s planes flying in light of financial woes the company was facing.

Losses for the airline this year are expected to be worse than the €31 million registered last year.