Malta to make ‘substantial’ state aid request for Air Malta

Air_Malta_Jet

Malta will be seeking the European Commission’s approval to provide “substantial” amount of state aid to Air Malta in light of the Covid-19 pandemic, Economy Minister Silvio Schembri confirmed on Monday.

In a reply to a parliamentary question by the Nationalist Party’s economy spokesperson Claudio Grech, Schembri said that while it was still premature to talk about specific amounts at this stage, he could confirm that the amount was substantial.

The European Commission has relaxed state aid rules in the wake of the Covid-19 pandemic, and the minister noted that various other EU member states were seeking to provide state aid to their airlines, even where they were not state-owned like Air Malta.

Schembri emphasised that in any case, any amount of state aid would need to be justified, and with this in mind, the government had recruited the best people possible – including international experts – to prepare its request for state aid approval. He noted that other countries have opted for various forms of state aid, including loans, guarantees, grants or a hybrid model, and Malta was studying the most suitable mechanism for the national airline.

In a follow-up question, Grech welcomed the request for state aid, but questioned whether it would take in consideration the pilots who were laid off earlier this year.

Schembri highlighted that the request needed to take into account the accumulated losses during the pandemic, so any salaries already paid would have to be considered. He also noted that the aviation sector faces high fixed costs – irrespective of passenger traffic – adding that salaries weren’t the main concern.

He emphasised that the main issue was one of sustainability; to provide assistance to Air Malta to allow it to continue operating and, eventually, grow.