Air Malta in the red as losses reach €150 million

State Aid crucial to avoid bankruptcy

 

Air Malta’s financial situation is facing a total meltdown and it will only be a fresh injection of taxpayer funds that can avoid the airline folding, according to financial projections.

As both the government and the airline refuse to give any details on the precarious financial situation at the national carrier, The Shift can reveal that until a few weeks ago,  Air Malta’s accumulated losses exceeded the €150 million mark and projections of further and substantial losses have been made by company consultants.

The airline’s current financial situation is the worst ever registered since its inception, 45 years ago, and the government does not seem to have a rescue and restructuring plan, except for asking Brussels for approval of more State Aid.

Company sources told The Shift that although the government will be shifting the blame of these massive losses on the pandemic,  the airline had been accumulating massive losses long before.

“Although the pandemic has had a big impact on the airline’s operations, leading to massive losses, mismanagement, abuse and wrong decisions have been the order of the day long before and the airline was already in massive financial difficulties,” the sources said.

Air Malta has not published its accounts, as required by law, for the past two years.

According to the last set of published accounts, for the year ending March 2018, the national airline had said that it managed to register a small profit of some €1 million. This was used politically by the Labour government to laud former Minister Konrad Mizzi’s ‘skill’ at turning around ailing State companies.

Yet it soon resulted that the registered ‘profit’ was just a ‘creative accountancy’ exercise, as the airline had postponed debts and included one-time profits, such as the sale of airport slots, to boost its accounts.

Company sources told The Shift that while the ‘real’ accounts should have showed losses of some €18 million by March 2018, these had doubled a year later, as Air Malta ended the following year (March 2019) with more than €30 million in the red.

Despite the dire situation at the airline, with most of its planes grounded and the tourism industry taking a hit, Economy Minister Silvio Schembri rarely makes any reference to Air Malta which falls under his responsibility.

The only concrete action which the inexperienced Minister took so far was to axe most of the experienced members of the board of directors and replace them with friends and acquaintances, mostly from his electoral constituency. The exception to his radical changes at board level was the Minister’s uncle, former Labour Minister Charles Mangion, who was kept as the airline’s chairman.

While confirming that the government will be asking Brussels for a new and ‘substantial’ State Aid package for the airline, Minister Schembri has declined to say how much taxpayers will be forced to contribute.

This is not the first time that Air Malta had to be saved by taxpayers.

In 2012, after years of losses, the EU had given the green light for an injection of some €200 million in the airline to avoid bankruptcy.

The aid was tied to a five-year restructuring plan which had to see the airline turn to profitability by the end of 2015.

The situation had become so bad in 2014 that then-Minister Edward Zammit Lewis and his politically appointed chairperson, Maria Micallef, were pushing to sell a majority stake to Alitalia, the ailing Italian national carrier.

Following fierce opposition, including from the Opposition and tourism stakeholders, the deal collapsed.

                           
                               
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saviour mamo
saviour mamo
7 days ago

Air Malta has become a financial burden like the Malta Drydocks.

mick
mick
7 days ago

Another monstrosity directly attributable KM the Labour commercial “star”, when are they going to put him on trial or put him in jail?

MR ADRIAN GOUDER
MR ADRIAN GOUDER
7 days ago

Air Malta is one of the most important companies in Malta, where business in Malta is concerned, and we cannot do without it as it serves the country’s interests via its non-profitable routes. Placing Labour friends of friends, and an immature and inexperienced Minister in charge of it only serves to show how little the Government understands its importance. Shame on Labour for letting it rot – if it shuts down Malta will be in very serious trouble indeed.

Paul Pullicino
Paul Pullicino
7 days ago

Added to this misery are the “consultancy” salaries handed to Super One hacks.

Raymond Farrugia
Raymond Farrugia
7 days ago

Dak li jigri meta tpoggi fit tmun Gahan malti! Ghalik din Silvio Schembri!

Joe Genovese
Joe Genovese
6 days ago

Taħseb kellek bżonn tgħidilna għal min kont qed tgħid?

OK, ma kienx jaf li għalih.

Allura tpoġġi lil kulħadd fl-istess keffa?

Albert Mamo
Albert Mamo
7 days ago

When you have totally incompetent labour government and a minister like Schembri that is a total idiot, what do you expect, except CORRUPTION in high order!!!🤑🤑🤑

Patricia Richards
Patricia Richards
7 days ago

So why did AirMalta employ more exorbitantly paid (friends) executives recently if the airline was in such financial dire straits.
All the free travel for past employees and their families and massive pensions for the latter.

This company has milked the tax payer for years and had the national airline has been used to over inflate the workforce for political favours and votes for years.

Perhaps it’s time to wind it up , isn’t this why there was the partnership deal made with Ryanair??

Last edited 7 days ago by Patricia Richards
Godfrey Leone Ganado
Godfrey Leone Ganado
7 days ago

A common pattern for the non-completion/filing of the audited financial statements:
Air Malta
Enemalta
Electrogas
Steward Healthcare
Crane Currency
MIG Trade (Diane Izzo – please note)

Robert Muscat
Robert Muscat
7 days ago

Why bail out air Malta? To have money to pay the astronomically high salaries paid to pilots?

Garru
Garru
6 days ago
Reply to  Robert Muscat

Il pilots rajr zejda stupidu..

Mamo Anthony T
Mamo Anthony T
6 days ago
Reply to  Robert Muscat

At least the pilots are responsible for your flight safety. And it is a huge responsibility. Not like the highly paid top persons including the notorious Karl Stagnio Navarra.

Joe Genovese
Joe Genovese
6 days ago

These crooks have all the luck.

At every turn.

A year into that EU shot-in-the arm, Lie Bare are swept into power.

And less than a year after that, they had frittered it all away, to grovel at Alitalia’s, eh, apron, to take them on for piggy-back rides.

The only heights these poseurs ever reached was in their hyperbole.

Their grounded flights of fancy.

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