The Maltese government is expected to announce the closure of the national flag carrier, Air Malta, during a press conference on Monday, its 50th anniversary, ending years of unsuccessful discussions with the European Commission in a bid to save it from bankruptcy after decades of mismanagement and political interference.
At the same time, Finance Minister Clyde Caruana will also announce the creation of a new airline, while taxpayers will foot a €300 million bill to cover the dissolution of Air Malta and the creation of the new carrier.
While the government is expected to position the development as a ‘seamless transition’, this will not be the case for hundreds of Air Malta employees who will be made redundant. Positions with the new airline are set to offer a lower remuneration package, similar to those offered by low-cost and budget airlines.
Monday’s announcement has been on the cards for some time despite Prime Minister Robert Abela and Caruana previously avoiding any confirmation. In August 2022, The Shift exclusively revealed the government’s Plan B, making it clear that the closure of Air Malta was imminent.
In April, The Shift also revealed that Air Malta’s closure would happen after the summer season, and a new airline created. Air Malta Chairman David Curmi later confirmed this.
The chairman, paid some €21,500 a month to close down the airline, was publicly chastised by Caruana for confirming the news.
A new €300 million price tag
In 2020, after years of mismanagement and losses of millions of euros, the government asked the European Commission to inject €290 million of fresh funds into Air Malta to save it from bankruptcy.
This was the second time the government asked for a ‘restructuring plan’, and the Commission informed the government it would not be possible and the airline would have to be shut down.
Caruana and Curmi started laying off staff, carrying out internal restructuring, and trying to cut costs to buy time and delay the bad news.
Hundreds of millions of euros of taxpayer funds were used for severance packages, voluntary retirement schemes, and new permanent jobs in other government institutions. The ground handling operations were also sold off.
But it was not enough to save the beleaguered airline as it continued to haemorrhage funds and accumulate millions in losses. The government refrained from publishing Air Malta’s accounts since 2018 to keep the losses under wraps.
In the meantime, Caruana tried to untangle generous collective agreements negotiated by his predecessor, disgraced former tourism minister Konrad Mizzi, which continued to drain funds from the airline.
The collective agreements, along with side agreements which gave pilots unprecedented terms, were put in place when Prime Minister Robert Abela was an adviser to Mizzi.
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The one million euro questions…
What will happened with the current pilot early retirement schemes. Will they be honoured by the government or by KM2?
What will happened with the pilot job guarantee enshrined in the current collective agreement?
What will happen with those pilot who already took early retirement?
How many millions do us taxpayers have to pay for other people’s incompetence?
Will the Kmiles be kept
Does that make any sense at all?
There are so so so many low-cost airlines flying to Malta.
The reputation of Air-Malta (or whatever the name will be) has probably suffered too much due to the unspeakable delays, use of dilapidated replacement aircraft, so that any investment here goes down the drain.
Anyway: Much too much.
Time for any Air-Malta (I am sorry) is over.
There are no over/under odds that would get me to bet against insolvency before the decade is out. Someone pretty smart once noted that repeating the same mistake over and over again while expecting a different outcome was a sign of insanity…
The TAX-PAYER will pay it all.
This is not incompetence.
This is about buying votes…
?
…and YOU pay for this!
So is this a case of “robbing Peter to pay Paul”? Anyhow,money is no object when it’s coming from the masses and when the deficit is Euro 9 billion plus…what’s a few more hundred million added to the massive debt?!??
NEW AIR MALTA TO BE ANNOUNCED ON MONDAY-
Minister Clyde Caruana:
1. Is the new Air Malta going to take/buy back the slots at London Heathrow/other airports which it had sold for creative accounting to another New Company Malta Air to boast politically that it made a surplus?
2. Is the current board of directors going to be retained, or is the EU implementing conditions on the recruitment credentials of members of the board, a two-thirds Parliamentary majority approval and their remuneration/perks?
3. Is the current Chairman/CEO Mr David Curmi being retained with his scandaleous remuneration/perks?
4. If the Chairman is being replaced, is he going to receive scandaleous terminal benefits delibitating to the new company or increasing the super losses of Air Malta on the back of our taxes?
5. Has the government made a freeze of employment in Air Malta and given notice to any new employees recruited over at least the last three years when it was already known that Air Malta is heading towards bankruptacy?
6. Are any new employees being recruited through the General Workers Union agency?
7. IS AIR MALTA GOING TO FILE ITS ANNUAL AUDITED ACCOUNTS SINCE FROM 2019 TO DATE WITH THE MALTA BUSINESS REGISTRY, OR ARE THESE GOING TO BE BURIED BEYOND THE EYES OF THE FREE PRESS AND THE GENERAL PUBLIC TO COVER UP FOR WRONGFULL TRADING BY THE DIRECTORS, WHICH IS A CRIMINAL ISSUE?
The Air Malta going bust is because they kept paying exorbitant fees to the bazzuzli while Air Malta was losing 170000 Euros per day are they going to keep these people on the books of the New One.
300,000000, peanuts, what about the equivalent amount to get this new fiasco off the ground? Don’t hold your breath. Muscat’s Golden boy Mizzi will likely have a solution and is waiting for the call
The mentally challenged incompetent promoted by Muscat as THE man to sort out “bumps in the road “, who was the kiss if death to everything I mean everything, he touched. was the final nail in a sick project that cost the country dear. Mafialand where everything is fucked continues to the bottom.
Issa saret ghasfur tac comb, sur Clyde u sur Robert Abela wara 50 sena itir u il partit li jipretendi li hu tal haddiem u iz zghir se jaghlaqa lil unika kumpanija tal ajru li taqghadna mad dinja. Mur gib lil Mintoff ghadu haj, kemm kien stinka u hadem biex irnexielu iwaqqafa.
At this rate Malta’s national debt will soon be reaching the ? 11 billion mark. These people are ruining us.
Will the Minister also explain how much the consultant company Kinght hood is being paid? Will he explain why all foreign Managment are ex Etihad, Air Serbia Alitalia, Air Seychells etc. All companies that where managed by the same person running the consultancy. Is it a matter of having freinds back.? The history does not augure much considering that a lot of the Airlines under the Etihad Group do not exist anymore.Will the Minister also explain why a lot of high ranking Maltese , pensioners,( replaced by these foreigners are still kept in the company with additional salaries being paid by tax payers on different consultancy jobs? The only way a national airline can succeed is that the govt does not interfere. As long as the Minister continues to dictate no National Airline can succeed and we tax payers continue forking out for the mess.
I do hope so. I have nearly 80,000 and at the moment, no way to use them
I doubt it, they belong to an airline that no longer exists.
Valletta Air, the new name for Air Malta, you read it here first !
So, for those who cite Mintoff’s turning in the grave etc if he knew where Airmalta ended up, should know that the national airline was Labour’s employment office, where Labour voters only were given jobs. So, favours galore!
And secondly, apart from carrying Maltese and Gozitan travelers, the bulk of the foreigners it transported were either Chinese, or Russians or Libyans.
This not to mention that while Airmalta was just an airline, much can be told about the airport, where Libyan Arab Airlines never had to pay landing fees plus maintenance, and indeed there was a bomb that was placed on a flight at Malta International Airport to finally explode above Lockerbie, Scotland.
The Labour Government of Mintoff and then ensuing governments all kept the status quo.
Now this.
Airmalta should be buried once and for all.
Laqwa zmien air
We were told by MINISTER KORROT MIZZI, that AIR MALTA made PROFIT. Back then. What HAPPENED TO THE MONEY?WHO POCKETED THEM..
From the announcement today, it looks like anyone with air miles will be paid for them in February next year.