The ongoing coronavirus pandemic is continuing to have a huge economic impact on carriers worldwide. One such financially-stricken airline is the Maltese flag carrier Air Malta, which is currently losing more than $200,000 every day. It has sought aid to overcome the current crisis, and the country’s government is currently negotiating with the European Commission.
Industry-wide financial impacts
According to The Times Of Malta, Finance Minister Clyde Caruana has confirmed that the country’s national airline is currently losing around €170,000 every day as the present crisis rumbles on. This is equivalent to around $206,000 every 24 hours.
Of course, Air Malta is far from the only airline to be making substantial losses due to COVID-19. Indeed, Lufthansa was losing as much as €1 million ($1.2 million) an hour last April. This has since dropped to around €500,000 ($600,000) an hour.
Government aid necessary to negate losses
Nonetheless, figures like these and that of Air Malta paint a bleak picture of the precarious situation that countless carriers currently find themselves in. In terms of what the Maltese flag carrier needs to do to survive, government aid looks to be an absolute necessity.
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According to Lovin Malta, Finance Minister Caruana has warned that a lack of state support could see the airline fold in weeks. The Maltese government is currently in negotiations with the European Commission, which it hopes will result in it being able to deliver state aid to its national airline.
The Maltese government and the European Commission allegedly have a shaky relationship, due to undelivered promises regarding Air Malta. Nonetheless, Caruana hopes that the country will be able to present an “honest and credible” to the commission in order to save the carrier.
Long-term economic difficulties
There is no denying that coronavirus has provided a huge personal and financial challenge for airlines worldwide. However, Air Malta’s struggles pre-date the ongoing pandemic. Lovin Malta details these in alarming fashion, stating that:
“The airline has been struggling for a number of years. It only recorded a profit once in the last 19 years. By the end of 2019, Air Malta allegedly recorded a loss of €30 million.”
2020 got off to a bad start for the airline, as the pandemic forced it to suspend its commercial flights last March, leaving it with minimal revenue streams. Later in the year, it became the subject of controversy surrounding a union matter.
Specifically, it is said to have offered pilots €1,200 a month in furlough pay, which ALPA, its pilots’ union, refused. Lovin Malta reports that this dispute led to some pilots losing their jobs, with the matter since having been taken to court.
With half of its eight-strong fleet currently grounded, according to Planespotters.net, the situation hangs in the balance for Air Malta. It will certainly hope that it can secure government aid before time, and money, runs out.
How do you rate Air Malta’s chances of obtaining government aid and surviving the current crisis? Have you ever flown with the Maltese flag carrier? Let us know your thoughts and experiences in the comments.