MaltaMedia.com

Finance Minister Tonio Fenech on Thursday revealed that talks between the government and the European Commission have started to discuss the loss of €31 million made by Air Malta in its last financial year and possible government support within EU state aid rules.

Mr Fenech also confirmed the nomination of Sonny Portelli as chairman of the airline since the present chairman Lawrence Zammit asked not to be reinstated. Mr Portelli will serve as deputy chairman during the transitory period. Mr Portelli is currently chairman of Go communications company.

A weak British currency that resulted in less British passengers and high fuel prices were the cause of the €31 million loss in the financial year ending 31st March 2009, he explained.

According to Minister Fenech, the government is investigating a reorganisation plan for the airline as well as recapitalisation. He also said that the existing situation was raising questions regarding the company’s economic sustainability.

Although the projections for this year still showed losses, Minister Fenech stated that they would be not as critical as last year and that Air Malta will be looking into reducing its costs and further perfecting its effectiveness.

Talks between the trade unions have started in order to change work practices, for efficiency to be of a higher level, especially since ground handling costs in Malta were 40 per cent higher than abroad.

Air Malta chairman Lawrence Zammit said that the current situation at Air Malta was not anyone’s fault and that the 2004 restructuring plan targets were achieved. He also maintained that albeit there is the need for further restructuring for the company to be sustainable, he is satisfied with his accomplishments in the past six years.