Air Malta’s second attempt at state aid being finalised

Air Malta is currently finalising a second attempt to obtain state aid from the European Commission

(EC) in the hopes of obtaining financial assistance to keep it going, the Minister for Finance Clyde Caruana told The Malta Independent on Sunday.

In November 2020, the government had already applied for state aid from the European

Commission in view of the losses incurred as a result of the Covid19 pandemic, but the European Commission requested additional information. For this reason, the government had to formalise and resubmit a second proposal.

To mitigate the economic shocks experienced due to the pandemic and save businesses, the European Commission put in place flexible State Aid rules by allowing Member states to provide direct support for hard hit companies and small firms as they may risk closing down without support.

Earlier this month, Minister Caruana had said that Air Malta is experiencing losses of over €170,000 a day just to keep aircraft operations going.

Caruana had also added that state aid for the local airline just for the year 2021 would need to run into “tens of millions” of euro. He warned that if the European Commission does not allow state aid, the airline would only have “a few weeks to live” before running out of money.

He had also insisted that what is promised to the European Commission needs to be carried out as the country has to show that it is credible and honest.

“This is the way the commission will help Malta to do what it needs to do in order to keep the national airline afloat,” Caruana said.

Reports have shown that the European Commission has approved state aid to various airlines in light of the pandemic. These include €120 million in state aid by the Greek government to compensate Aegean Airlines, €350 million in state aid by the Finnish government to support airport operator Finavia, €290 million by the Belgian government to Brussels Airlines and €7 billion in French aid to Air France.

In an Indepth interview, the Executive Chairperson of Air Malta, David Curmi, had said that they will be making a second attempt and provide the European Commission with more information regarding Air Malta’s specific case.

“I am hopeful that this time round our request will be considered better. Having said that, this is a long and hard exercise which requires a lot of negotiations,” Curmi said during the interview.

As a result of the Covid-19 pandemic, the national airline, like many others within the aviation sector, experienced an enormous negative impact as national governments across the EU imposed a number of travel restrictions to limit the spread of the Coronavirus.

Curmi expressed his hope that the Commission starts to understand the importance that national airlines have in flying in cargo, medicines and mail “as if the airline were to shut down, the country would also shut down.”

With regards to the national airline’s annual financial figures, Air Malta has held back from publishing its accounts for the financial year ending 2019. The local airline usually publishes its annual figures in April.