Air Malta state aid talks could drag on for weeks as EC requests excruciating detail
, Air Malta state aid talks could drag on for weeks as EC requests excruciating detail

Talks between the government, Air Malta and the European Commission on the airline’s request for state aid could last several more weeks, The Malta Independent has learnt.

Finance Minister Clyde Caruana travelled to Brussels this week to continue talks with the Commission.

Air Malta sources said the EC had requested painstakingly detailed information, including data on all daily flights, passenger numbers and all expenses the airline is incurring.

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The national airline, whose operations have been decimated by the Covid-19 pandemic, is seeking to get around €290 million in Government assistance. But any form of State Aid must be approved by the European Commission, and this is not an easy task, especially given that several European airlines have asked for financial backing from their respective governments.

Caruana recently said that Air Malta was experiencing losses of over €170,000 a day just to keep aircraft operations going. 

Sources last week described the ongoing negotiations between the Government and Air Malta representatives and the European Commission as “difficult and uphill.”

The airline had made its first pitch for state aid last year, but the Commission had asked for a more detailed request. That request was provided in the past few weeks, but it seems that the Commission has asked the airline to go into even more minute detail. As a result, the negotiations could drag on for several more weeks.

In the meantime, Air Malta has now axed performance bonuses for its top management as it continues to cut costs.  The move will save the airline some €500,000 annually.

In a letter from Executive Chairperson David Curmi, the management was told that the performance bonuses have been “permanently withdrawn with immediate effect.” 

Extensive Covid-19 work-from-home policies as well as accumulation of vacation leave by management staff members were also given the chop, this newspaper has learnt.

In a recent Indepth interview, Curmi had told this newsroom that the airline could further thin out its workforce, with some services being hived off. The airline, he said, would have to concentrate on its three biggest expenses: aircraft operations, payroll and fuel.

Curmi had also said that there would be changes at the company’s top-level management. “The shareholder has already signalled that the company cannot continue operating with a business-as-usual attitude. There has to be change in the mentality and the culture within the company,” he had said.

Air Malta, which has been crucial in delivering vital resources during the Covid pandemic, including medical supplies and the Covid-19 vaccines, recently launched its Summer 2021 schedule.

It will operate 51 return weekly flights to 15 destinations in June. It is also restarting flights to Lisbon, Munich, Prague and Vienna.

 

 

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