Air Malta in talks with Turkish Airlines

Decision on further reduction of the Air Malta fleet due soon

Air Malta has to turn a profit by March.

Air Malta has to turn a profit by March.

Discussions are under way with Turkish Airlines – the fourth largest carrier in the world – over a strategic alliance with Air Malta, The Sunday Times of Malta has learnt.

Company sources told this newspaper that discussions are being held on a regular basis with Turkish Airlines over an alliance that may include privatising part or the entire airline.

“The discussions are focused on a strategic partnership with Turkish Airlines, who are seeking to expand further,” the sources said.

“The government is currently leaving all its options open and is not excluding anything. Discussions range from a strategic partnership to full takeover of Air Malta.”

Decision soon on whether to reduce the fleet

However, Tourism Minister Edward Zammit Lewis declined to comment on the talks.

He said the government was always keen to discuss any potential benefits that might arise from better cooperation with major airlines operating to and from Malta.

He said: “Discussions on how to continue improve our relationship with all the major airlines operating to and from Malta is an ongoing process”.

Meanwhile, Air Malta’s board of directors is soon expected to take a decision on further reduction of the airline’s fleet.

Originally, the airline operated 12 aircraft which were reduced to 10 through the implementation of a five-year restructuring plan approved by the European Commission, which ends next March.

According to sources, the company is contemplating the implementation of recommendations by consultants Ernst & Young to reduce the airline’s fleet by another two aircraft.

The company’s engineering department has already been given instructions to technically prepare two aircraft for a possible “departure” to a new airline.

The suggestions by Ernst & Young are not new as the consultants had made similar proposals prior to the approval of the restructuring plan in 2010. However, at the time, the government and management had turned down the option as it was deemed unfeasible both for the airline’s future and for Malta’s tourism needs.

A further reduction in the fleet capacity is likely to be accompanied by layoffs

“A further reduction in the fleet capacity is likely to be accompanied by layoffs,” the sources said.

Dr Zammit Lewis did not rule out the possibility of a further reduction in the fleet, stating that the airline’s objective was to operate in an “efficient and sustainable way”.

The clock is now ticking for Air Malta as the company has to turn a profit by March. Should it fail to do so, no more government subsidies will be allowed and the company will have to either wind down or allow a private injection of fresh funds.

Although current low oil prices are expected to help the company’s accounts, the airline’s management is not taking any chances.

Times of Malta last week reported that the company’s chairwoman Maria Micallef told contracted employees that further sacrifices were expected.

Meanwhile, the General Workers’ Union confirmed that the company was currently holding discussions to cut costs in relation to employees on definite contracts.


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