Air Malta set to enter new joint venture despite pending state aid injection

The Shift is informed that Air Malta is about to enter a new ground handling venture with an Italian company while the government waits for a green light from Brussels to pump millions of euros of taxpayers’ funds into the struggling airline.

Sources close to Air Malta revealed that the airline, now led by government-appointed Chair David Curmi, will form a new entity with Aviation Services SPA to provide ground handling to Air Malta and several other airlines as early as this summer.

Aviation Services SPA provides similar services at several Italian airports, including Fiumicino, Venezia and Cuneo, but is not considered one of the top Italian players in the ground services sector.

The sources revealed that while hundreds of Air Malta ground handling staff have left their jobs or been given alternative government employment under taxpayer funded voluntary schemes, the new joint venture with the Italian company will employ foreign workers to do those same jobs.

“While taxpayers are being forced to bail out Air Malta and its employees once again, the company has suddenly entered into new business, taking more risks instead of trying to utilise its own resources and slash expenses,” the sources said.

Asked to explain the business sense of this new joint venture while Air Malta is losing tens of thousands of euro per day, Chairman David Curmi refused to reply.

This development is just the latest failure in disgraced former minister Konrad Mizzi’s 2017 plan to reform the struggling airline.

Following talks with the General Workers Union conducted by former President George Abela and Prime Minister Robert Abela (then both Air Malta consultants), Mizzi announced that ground handling employees would be transferred to a new government company called Air Malta Aviation Services (AMAS).

AMAS was registered in 2018 but the transfer of Air Malta employees never happened. This was only revealed by the government last January when Finance Minister Clyde Caruana announced the latest national airline restructuring exercise accompanied by a fresh request to the EU to inject €290 million in state aid.

The government offered Air Malta employees tens of thousands of euro in payments to leave the airline or be given an alternative government job.

No details have been provided so far as to how many Air Malta employees, including those on temporary contracts, agreed to the voluntary scheme or accepted alternative government employment.

Meanwhile, Air Malta is losing some €170,000 per day, and Brussels has still not agreed to more state aid.