The government of Malta has confirmed plans to shut down the existing Air Malta next year, with a new company KM Malta Airlines PLC taking its place.
The troubled state-owned carrier has been loss making for much of the last 20 years, with nasdaq.com reporting in 2022 that the airline had racked up combined operating losses of €258 million since 2005.
Last year Air Malta outlined plans to downsize its workforce, cut routes and offload its ground handling and cargo operations, and a decision has now been made to close the current Air Malta on 31 March, 2024, before immediately replacing it with a “a new national airline for the Maltese Islands”.
The Maltese government will be the sole shareholder of the new carrier, and it is understood that it will continue to fly under the Air Malta branding.
Prime Minister Abela said that the new airline would retain 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 become viable without continued state subsidies, in agreement with the European Commission government decided to establish a new airline built on a realistic business model underpinned by a sustainable long-term strategy”.
A five-year business plan has been established, with a route network designed by industry-leading experts SABRE “for optimal commercial efficiency connecting Malta to the capital cities and primary airports of mainland Europe and beyond”.
There will initially be 17 routes, “with increased frequencies added on some existing mature routes to maximise aircraft utilisation and optimise commercial performance”.
The carrier also said that it would offer “a fully unbundled product offering with economy and premium services, based on analysis which indicated a clear demand for premium and premium economy class flights serving Malta”.
Customers can continue to book tickets under the current Air Malta for flights up to 30 March, 2024, with services after this date being operated by the new airline. Any customers who have booked for travel on or after 31 March, 2024 will receive a refund, before being offered the opportunity to book the same flights with the new carrier from 1 December.
Commenting on the news Clyde Caruana, the Minister for Finance and Employment, said:
“Throughout our discussions and negotiations with the European Commission I have always insisted on the importance of our country to have a national airline.
“We consider our national airline to be a critical part of the infrastructure of our Islands and the air connectivity the national airline provides 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 p.l.c. within the parameters of EU state aid rules it has been decided to establish a new airline from a clean sheet – a new airline that builds on the many strengths of Air Malta but with a strong focus on long-term financial sustainability.”
