Malta’s Prime Minister Robert Abela has announced that the country’s national airline, Air Malta, will be closed down and replaced by a new company next year as the government seeks to address the airline’s financial difficulties.

While the new airline will offer a smaller number of destinations, it will maintain the same fleet and re-employ the existing staff in addition to continuing to operate under the Air Malta brand, which is owned by the government, after the switchover between March 30 and 31, 2024. 

The decision comes after negotiations between the Maltese Government and the European Union after the bloc refused to provide a requested cash injection of €290m ($304m) to keep the airline flying. It means the new company will be partly owned by private enterprises, either through the issuing of shares or through a strategic partnership. 

Malta’s Minister for Finance and Work, Clyde Caruana, said he had persuaded the EU on the importance of a national airline for the country: “We consider that our national airline is a crucial part of the infrastructure of our islands and the air connectivity that the national airline provides is inextricably linked to economic growth and success of our country. 

“The new airline will build on the many good things of Air Malta, but with a strong emphasis on long-term financial sustainability.” 

To help the transition to a new airline, which will officially be called KM Malta Airlines, the government will reportedly invest €350m into the new company, with €300m covering the purchase of three aircraft that are currently leased, with other costs including the purchase of airport slots, hangars and other property from Air Malta. 

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According to the Times of Malta, the new airline will continue profitable routes to major European cities such as Berlin, London, Paris and Rome as it targets a higher passenger load, but less popular destinations will be discontinued, including services to Naples, Nice, Geneva, Lisbon and Tel Aviv.