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