Maltese Government To Replace Air Malta With New Airline Next Week

The Maltese government is set to replace ailing Air Malta with a new flag carrier in the coming week, according to a report by Malta Today. The news came after the European Commission rejected the government’s request to inject €290 million ($307 million) into the carrier to save it from bankruptcy.

What to expect?

More details about the new national airline are expected to be made public on October 2, 2023. According to the report, intensive work has been underway to prepare for the changeover. Not much has been disclosed about the exact details as they have been kept under wraps.

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However, what is known is that the airline’s livery and name will change, and some modifications will be made to the airline’s frequent flyer program. Details about the business model will be shared on Monday.

Air Malta currently has a total of eight aircraft in its fleet at an average age of 5.7 years old, according to ch-aviation.com. The fleet comprises six new-generation Airbus A320neos and two Airbus A320-200 jets. All of these aircraft are on lease. The new national airline replacing Air Malta will most likely inherit Air Malta’s fleet of Airbus A320s.

According to Flightradar24.com, all Air Malta flights are currently operational and will remain so. Air Malta offers flights to 21 destinations across key European cities. Passengers can anticipate a smooth transition, but it is the workers who may bear the brunt of this situation, as they would likely go through a process to integrate into the new airline, even though the airline has stated it will retain its staff.

What happened to Air Malta?

Air Malta has consistently experienced financial losses for numerous years, attributed mainly to political interference and questionable management choices. The impact of the global COVID-19 pandemic has only exacerbated these challenges, causing the airline’s financial situation to deteriorate even further.

The airline underwent two restructurings, but they did not prove effective. In 2004, Air Malta initiated its first restructuring effort, strategically timed just before Malta officially became an EU member, allowing it to avoid the oversight of the European Commission.

However, six years later, the government was compelled to intervene again to provide financial assistance to the airline. Despite its five-year restructuring process, the company continued to face economic challenges.

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The COVID-19 pandemic made the airline’s financial problems worse. At the height of the pandemic in 2020, the Maltese government said they needed to invest more money to save the airline from bankruptcy and asked the European Commission to inject €290 million of fresh funds into the carrier.

This was the second attempt to restructure the airline, but to no avail, as the EU Commission rejected the request for state aid after three years of tough negotiations. Reflecting on the ailing competitor, Ryanair’s CEO Michael O’Leary said in 2022 that Air Malta will never make a profit due to its small size within Malta’s competitive aviation market.

Ryanair’s Malta Air subsidiary, formed in partnership between the Irish budget airline and the Government of Malta in 2019, is currently the largest carrier based in Malta. Another European low-cost carrier, Wizz Air, has recently formed a new subsidiary in Malta called Wizz Air Malta.

Though it remains early in the development of the successor, Air Malta’s CEO has confirmed that any replacement airline will remain a full-service carrier, continuing to compete against Ryanair’s Malta Air and the newly launched Wizz Air Malta.

What are your thoughts on this? Do you believe Air Malta’s successor will reach profitability? Let us know in the comments section below.

Sources: Malta Today, Times of Malta, ch-aviation.com, Flightradar24.com