Govern­ment con­firms Air Malta-Al­i­talia deal falls through, other ne­go­ti­a­tions tak­ing place

Malta Independent - - FRONT PAGE - Ju­lian Bon­nici

Tourism Min­is­ter Ed­ward Zam­mit Lewis yes­ter­day evening told unions that the Air Malta-Al­i­talia deal has fallen through. This was the first time the govern­ment con­firmed that the ne­go­ti­a­tions be­tween the two air­lines had bro­ken down.

“We looked at whether or not it would ben­e­fit em­ploy­ees and our touris­tic net­work; and we were pre­pared for this even­tu­al­ity,” Dr Zam­mit Lewis told the press yes­ter­day evening right af­ter a meet­ing with the air­line’s unions.

The Min­is­ter also said that there are ne­go­ti­a­tions tak­ing place with other in­vestors, which could be lo­cal or for­eign, re­gard­ing a po­ten­tial cash in­jec­tion, he could not di­vulge any in­for­ma­tion on the in­ter­ested par­ties.

Nei­ther was he in a ca­pac­ity to pro­vide a time­frame for when such a deal could ma­te­ri­alise, and he would not be pressed into giv­ing any guar­an­tees that a deal could be struck be­fore the elec­tions in 2018.

In an of­fi­cial state­ment is­sued later, the govern­ment said Air Malta and Al­i­talia have jointly de­cided to ter­mi­nate the talks which would have led to Al­i­talia be­com­ing a 49% share­holder in Malta’s na­tional car­rier.

“The two air­lines agreed that the cur­rent chang­ing land­scape in the air­line in­dus­try was not ideal for such a trans­ac­tion and that both air­lines would con­cen­trate on the cur­rent chal­lenges with­out en­ter­ing into a part­ner­ship to­gether.

“Air Malta and Al­i­talia will con­tinue to col­lab­o­rate closely com­mer­cially through an ex­ten­sive code-shar­ing pro­gramme al­ready in place,” the state­ment said.

When asked by The Malta In­de­pen­dent as to whether or not there is a pos­si­bil­ity that Air Malta would not be saved, the Min­is­ter said that, as the party who cre­ated the na­tional air­line, the cur­rent govern­ment has no in­ten­tion of al­low­ing it to fail.

“We are pre­pared to take de­ci­sions, as was the case with the re­moval of sand­wiches from flights, which saved the air­line €4 mil­lion, the de­ci­sions on the Frank­furt and Manch­ester routes, the rene­go­ti­a­tion of the air­line’s in­for­ma­tion tech­nol­ogy… we have done a lot of work and will con­tinue tak­ing strong de­ci­sions. We man­aged to do all this with­out fir­ing any em­ploy­ees or re­duc­ing wages,” the Min­is­ter added.

The Air Malta-Al­i­talia ne­go­ti­a­tions were first con­firmed by the govern­ment in April of last year, when Dr Zam­mit Lewis an­nounced the sign­ing of a Me­moran­dum of Un­der­stand­ing MoU be­tween the two air­lines.

This opened up ne­go­ti­a­tions with the hope of see­ing Al­i­talia buy a 49% stake in Air Malta. UAE-based car­ried Eti­had Air­ways, in turn, owns 49% of the shares in Al­i­talia.

There were many bumps along the way, the most no­table be­ing when Al­i­talia Pres­i­dent Luca di Mon­teze­molo said Air Malta was a ‘sub-zero risk’ oper­a­tion which would not cost the Ital­ian air­line one euro.

Through­out the past few months the govern­ment de­nied sev­eral re­ports that the deal had fallen through but this time round it is of­fi­cial – ne­go­ti­a­tions are over and Air Malta re­mains with­out a much-needed strate­gic part­ner.

The out­look is look­ing in­creas­ingly bleak for the ail­ing air­line with the Euro­pean Union Com­mis­sion con­firm­ing that no more state aid would be al­lowed to be given to Air Malta, as was re­ported in The Malta In­de­pen­dent on Sun­day last month.

The un­cer­tainty sur­round­ing the air­line in­creased in re­cent months when Air Malta be­gun char­ter­ing for­eign low cost air­crafts for a num­ber of its flights.

When asked about whether or not he felt it was fair that cus­tomers who pay high rates are left with an in­fe­rior ser­vice, the Min­is­ter said that while he ex­pressed sol­i­dar­ity with the peo­ple who were put on such flights, he main­tained that it was more im­por­tant that Air Malta al­ways kept to its flight sched­ule.

He also at­trib­uted the use of the afore­men­tioned air­crafts as a means of fill­ing in the gaps left by Air Malta air­planes which had needed main­te­nance or ser­vic­ing, and said the is­sue was not a cost-cut­ting mea­sure.

In a state­ment, the Na­tion­al­ist Party said that the fail­ure of the deal demon­strated the govern­ment’s the lack of vi­sion for the air­line, which was cre­at­ing un­cer­tainty for work­ers and their fam­i­lies.

The PN said Air Malta’s fu­ture must be on solid ground, and the govern­ment should not travel down roads that lead to nowhere. In­stead, it should ac­cept the PN’s pro­posal that Air Malta be strength­ened by lo­cal in­vest­ment.

The PN said that the choice of Al­i­talia was not the best the govern­ment could have made, and it had been clear from the start that the talks were doomed to fail­ure.

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