Air Malta Chairperson says discussions with Alitalia ongoing, but Italian media claim otherwise

Air Malta Chairperson Maria Micallef yesterday said that the negotiations with Italian national airline Alitalia are still ongoing. In comments to The Malta Independent, Mrs Micallef said that the company is keeping all opportunities open. “Negotiations are still going on and that is all I can say for now,” she said while giving a comment at the World Tourism Fair in London.

Media reports in an Italian newspaper, however, suggest otherwise. In fact, Il Giornale reported yesterday that the deal between Italian airline Alitalia and Air Malta is off. An article which was published yesterday claims that although the news has not yet been made official, Alitalia will not be acquiring 49% of the Maltese national airline’s shares.

“It appears that the deal has collapsed,” the report in Il Giornale website states.

In a statement yesterday evening, the government said it took note of “the various reports published in the media today and of the fact that none of these quote official sources.”

It is on the contrary confirmed that talks are still ongoing, the government said.

As previous statements have indicated, the government will keep addressing issues at Air Malta that had been left pending for years, it concluded.

Last April, Alitalia and Air Malta signed a memorandum of understanding which was supposed to lead to negotiations aimed at the sale of 49% of the company’s share. The final decision between the two parties was supposed be have been taken by the end of September.

The newspaper quotes ‘Maltese sources’ saying that Etihad, parent company of Alitalia, ‘lost its enthusiasm’ to strike the deal. The article noted that the Maltese government’s negotiations are influenced by the upcoming general elections. It says that in this regard, the Maltese government does not want to take unpopular decisions.

Negotiations with the EU Commission in 2011 allowed a state subsidy to Air Malta of €130 million and it was agreed that by 2014 Air Malta had to balance its budget, and register a profit by March 2016. This has not been achieved.

After this period, under EU state-aid rules which safeguard fair competition within the EU’s internal market, the only injection of cash allowed would have to come from private sources.

Air Malta registered losses of €4 million for the financial yearend March 2016, significantly lower than the nearly €17 million loss registered a year earlier. The EU Commission did not impose any penalties in view of the progress made between 2015 and 2016.

Earlier this year the government said that it spent months of negotiations with various airlines in order to acquire a strategic partner which would buy a minority stake and inject some much needed funds into Malta’s national airline – resulting in the MoU with Italy’s national carrier, Alitalia.

In October, it had been reported that the government was likely to pull the plug on the talks between the two airlines.

Earlier this year, The Malta Independent had reported how Alitalia registered a loss of more than €200 million for the year 2015. Moreover, the company which is 49% owned by Etihad, is expected to lose almost another €100 million by end of this year.

Air Malta registered losses of €4 million for the financial year-end March 2016