Air Malta should have a strategic partner, but the government had to remain majority shareholder, Prime Minister Joseph Muscat said yesterday.

The Sunday Times of Malta reported that talks were under way between Air Malta and Turkish Airlines on the possibility of a partial or full privatisation of the national airline.

Asked to elaborate on the talks with Turkish Airlines, Dr Muscat said on television that he was not ready to sell Air Malta. “I would like to see a strategic partnership that need not be through a sale of shares but through other ways,” he said without elaborating.

During the TV programme Reporter, Dr Muscat said the government had no intention of giving up its majority stake in the airline. However, he insisted that before deciding on Air Malta’s future, it had to be determined where the national carrier wanted to go.

Reacting to The Sunday Times of Malta report, the Malta Hotels and Restaurants Association again emphasised the need for Air Malta to remain in Maltese hands. Although MHRA was not against privatisation, the government should consider adopting the Bank of Valletta model as a solution, its president, Tony Zahra, said. “This means that while the government retains a minority interest, say 25 per cent, the other 75 per cent is sold to Maltese investors and thus brings in commercial interests and management”, he added.

I would like to see a strategic partnership that need not be through a sale of shares but through other ways

According to the MHRA, Air Malta had so far failed to change its business model despite seeing increasing competition from various airlines.

The change that happened at Air Malta was too little, too late, it said. Mr Zahra warned that losing control to foreign interests at Air Malta was something the MHRA would not support.

Apart from ongoing talks with a possible strategic partner, The Sunday Times of Malta also reported that the company was contemplating whether to reduce its fleet further. If this happens, layoffs could follow.

Air Malta is in the final year of the implementation of a five-year restructuring exercise agreed with the EC. The programme, which aims at returning the airline to profit, ends in March 2016.