The loss-making carrier will operate until 30 March 2024 when it will be replaced by a new national carrier, KM Malta Airlines.
The change comes after the European Commission refused to permit the Maltese government to fund a near €300 million bail-out of Air Malta - under European law, member states are forbidden to give cash injections to troubled government-owned airlines.
Instead, a partial privatisation will see the Malta government retain a majority share in the new company while seeking a strategic partner.
The Times of Malta said the new airline would retain the current fleet of eight Airbus A320 short-haul aircraft but trim the number of routes from a pre-pandemic 37 to 17. In the UK, the new carrier will serve only Heathrow and Gatwick.
Malta’s prime minister Robert Abela said Malta Airlines would be profitable in about two years. The existing workforce of 400, slashed from more than 1,000 in the last two years, will be retained, with pay rates likely to be cut.
Data revealed the carrier had lost an average €4,000 per return flight in 2019/20 but under the restructure was projected to make €2,866 per rotation via increased load factors.
The name of the new venture is undecided. The Maltese government owns the Air Malta name and livery and is opening bids, which could either see the new carrier adopt it or a competitor seize the established brand.
Existing Air Malta bookings will be refunded from 1 November for flights booked beyond 30 March, as tickets will not be transferred. The airline said refunds “are guaranteed by the government of Malta”. Flights on the new carrier will go on sale on 1 December.
Air Malta warned some new ticket prices “may be lower or higher depending on the date of travel”. Air Malta also said its Flypass loyalty programme would close on 29 February. No unclaimed miles would be transferred after this date, but the money equivalent will be credited.
