Government insists on strategic partner for Air Malta, but does not rule out local investment

Tourism Minister Edward Zammit Lewis insisted yesterday that the way forward for Air Malta was to find a strategic partner but said the government had never closed the door for local investment.

His comments came after a newspaper report this morning said the government was likely to pull the plug on the Air MaltaAlitalia deal.

Questioning the timing of the report, Dr Zammit Lewis said that, while local investment was not being excluded, Air Malta needed to join a larger network.

He mentioned how, in an interview in The Malta Independent, former Air Malta chairman Louis Farrugia had insisted that the only real choice for Air Malta was to enter a strategic alliance.

“I brought this Memorandum of Understanding before this very house and I am not ashamed of it. I don’t want quick fixes for Air Malta, but long term sustainability.”

He also accused Opposition Leader Simon Busuttil of being “inconsistent” on Air Malta. “Sometimes he says Air Malta needs a strategic partner then he tells us that he would issue the airline’s shares to the public. Which one is it?” The Tourism Minister said he had not once heard Simon Busuttil speaking on Air Malta under PN governments. “He is not credible on the subject because he has never done anything about it.” The Minister did not exclude that an IPO (Initial Public Offering) would be issued once the airline was on more solid ground.

A lot of progress had been registered at Air Malta, Dr Zammit Lewis said. This included the renegotiation of certain contracts and arrangements for workers. “We have been consistent and have always insisted that the government has to retain a 51% shareholding.”

Dr Zammit Lewis was speaking in the debate on the financial estimates of the tourism ministry. Today is the first of many marathon parliament sessions following the budget. Earlier, Opposition MPs had insisted that the budget speech did not focus much on the vital sector.

Reacting, the minister said the budget speech gave direction, not details. He pointed out that tourism had grown by some 35% since 2012 and, contrary to the PN’s claims, the number of airline routes was increasing.

“The PN criticized us on Gozo. What I can say is that seven major Gozo hotels closed during the last two PN administrations while we have several applications for new hotels, hostels and guesthouses, not to mention the applications for AirBnB services.”

The PN Leader, Dr Zammit Lewis said, seemed to be oblivious to the developments surrounding him.

The target for 2017 is to exceed the two million tourist mark. “We should reach this number, irrespective of the EU presidency. We are already at 1.9 million tourists and I believe we can do it.”

A lot of the work being carried out was not mentioned in the budget but this did not mean that nothing was being done. The government, he said, was working on the seasonality problem, had created an insolvency fund for when travel agencies went bust and the cruise liner sector was also growing.

Dr Zammit Lewis said some 700,000 cruise liner passengers were expected to visit Malta next year while a second cruise liner – the P&O Oceana – would make Malta its homeport.

The MTA, he said, was funding security cameras in Paceville to make the area safer and was also working on increasing the number of Blue Flag beaches in Malta.

The authority was also working on the Comino situation, which he described as a ‘Babylon.’

“The MTA does a good job of marketing the island but tourists find something completely different when they get there.” The MTA is working on a report and operators will have to abide by much stricter rules.

Only 111 words on Air Malta in three-hour long budget speech - PN tourism spokesman

Earlier, Opposition spokesperson for tourism Antoine Borg complained today that there were only 111 words on the subject of Air Malta in the budget speech.

“There was more on Comino than on Air Malta in the budget speech,” Mr Borg said. “I counted and there are only 111 words on Air Malta in the entire speech. Such an important issue deserves more. As a party we have said that this was a cosmetic budget. On tourism it was a ‘touch and go’ job. It is like the government found that it had two empty pages in the budget speech and decided that it might just as well say something on Air Malta.”

The PN MP also urged the government to be straightforward on developments at the national airline after more reports have emerged on the possibility that the Air Malta-Alitalia talks might be scrapped. “Six months ago we were shown the MoU and given the understanding that a strategic partner had been found. Yet nothing has materialized so far and we do not know what is happening.”

Turning to other subjects, Mr Borg said the proposed investment in the tourism sector left much to be desired. “The finance minister told us how money collected from the 50 cent tax will be used to upgrade touristic areas. But the embellishment of such areas should be taken for granted – we should not have to hear it once a year in a budget speech.”

Mr Borg said Gozo was “another disappointment”, with the government having failed to make solid commitments. “They will mention the Cittadella project, which is, after all, a PN project. Gozo needs much more.”

He also said that the drawing up of a master plan for Paceville was positive because large scale development needed a holistic plan. “The Opposition has an open mind on the subject. In the meantime there are some factors we cannot ignore. We have to be careful not to close off the area during the time it takes to implement the masterplan.” He also pointed out that some shops, bars and eateries depended on Paceville’s entertainment establishments and one had to be careful that these were not put out of business.

Mr Borg also insisted that the government should have been more generous with grant schemes because tax credits have a tendency to favour thriving businesses while other, less successful ones do not get the full advantage.

PN MPs Robert Arrigo, Kristy Debono and Claudio Grech also spoke for the Opposition during this morning’s debate, while Silvio Parnis, Godfrey Farrugia and Franco Mercieca spoke for the government.