The Maltese government has confirmed its plans to close the current Air Malta next year and replace it with a new company, KM Malta Airlines PLC.
The troubled state airline has been making losses for much of the last 20 years, with nasdaq.com reports in 2022 that the airline had accumulated combined operating losses of €258 million since 2005.
Last year, Air Malta outlined plans to reduce its workforce, cut routes and offload its cargo and ground handling operations, and now the decision has been made to close the current Air Malta on March 31, 2024, before immediately replacing it with “a new national airline of the Maltese Islands”.
Air Malta will reduce its workforce by half
The Maltese government will be the sole shareholder in the new airline and it is understood that it will continue to fly under the Air Malta brand.
Prime Minister Abela said the new airline would maintain its current workforce and fleet size, which consists of eight A320 neo aircraft.
In a press release, Air Malta said that “As it would not have been possible for Air Malta to be viable without continued state subsidies, in agreement with the European Commission government decided to establish a new airline based on a realistic business model supported by a sustainable economy. long-term strategy.
A five-year business plan has been established, with a route network designed by leading industry experts SABER “for optimal commercial efficiency connecting Malta to the capital cities and major airports of continental Europe and beyond.”
Initially there will be 17 routes, “with higher frequencies added on some existing mature routes to maximize aircraft utilization and optimize commercial performance.”
The airline also said it would offer “a fully unbundled product offering with economy and premium services, based on analysis that indicated clear demand for premium and premium economy class flights serving Malta.”
Customers can continue to book tickets with the existing Air Malta for flights until March 30, 2024, with services after this date to be operated by the new airline. Any customer who booked travel on or after March 31, 2024 will receive a refund, before being offered the opportunity to book the same flights with the new airline from December 1.
Commenting on the news, Clyde Caruana, Minister of Finance and Employment, said:
“Throughout our discussions and negotiations with the European Commission I have always insisted on the importance of our country having a national airline.
“We consider our national airline to be a fundamental part of our islands’ infrastructure and the air connectivity provided by the national airline is inextricably linked to the economic growth and success of the Maltese islands.
“In the absence of a solution for the capitalization of Air Malta plc within the parameters of EU state aid rules, it has been decided to create a new airline from scratch: a new airline that takes advantage of Air Malta’s many strengths but with a strong focus on long-term financial sustainability.”