Air Malta will be dissolved by the end of 2023, according to a report in the newspaper The Shift. The European Commission would reject the Maltese government’s request to inject capital into the airline, which has been facing a difficult economic situation that has worsened since 2020.
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New national carrier to replace Air Malta
The company’s CEO, David Curmi, confirmed today that a new national carrier will replace Air Malta.
Government officials, who had earlier asked the European authorities for 290 million euros to rescue the company, are now discussing how to establish a commercially viable successor flag carrier.
According to Curmi’s statement to the Times of Malta, all employees will be made redundant, but will be able to apply to join the new company. The management stressed that all current employees will receive severance payments.
While Air Malta had a workforce of more than 1.000, it has recently downsized and now employs 330 people. At the time, downsizing was seen as one of the last options to maintain operations. In addition, among other measures, ground handling services were outsourced.
For customers, on the other hand, the transition should be smoother. In that sense, Curmi argued that Air Malta will continue to operate until the new airline is ready to take over and offer scheduled services through its own booking platform.
Alitalia-style transition
The scenario is reminiscent of Alitalia’s transformation into ITA Airways in 2021. In fact, Curmi himself has spoken out in favour of emulating the Italian government, which reached an agreement with the European Commission to replace its flag carrier with a new brand that took over its assets.
In mid-2022, it emerged that the Maltese government was considering dissolving Air Malta and transferring profitable assets to a new state-owned airline. Months later, Curmi confirmed the existence of the alternative plan for supranational institutions to provide the money needed to keep it afloat.
However, the company already received similar aid in 2016, and the European Union rescue and restructuring regulations stipulate that it can only be granted once in a ten-year period.
