European Commission Approves €130 Million State Aid Granted to Air Malta
After conducting an in depth investigation the European Commission has decided that the €130 million state aid, granted to the state-owned airline Air Malta, is in line with EU state aid rules as the money is for restructuring plans which adequately address the financial problems of Air Malta. It is believed that the restructuring process, which will include a significant decrease in capacity and the sale of assets, should ensure the viability of Air Malta in the long term without distorting competition. This latest tranche of money follows on from a loan facility of €52 million, granted to Air Malta as rescue aid, which was authorised by the Commission in November 2010 on condition that the Maltese authorities submitted a restructuring plan within a six-month period.
"In May 2011, Malta notified the Commission a €130 million capital increase to help restructure the company, which has been in difficulty for several years. The Commission had a number of doubts whether the notified restructuring plan complied with the requirements of the 2004 EU Rescue and Restructuring Guidelines (see IP/04/856 and MEMO/04/172). Therefore, the Commission opened an in-depth investigation in January 2012 (see IP/12/42)." (IP/12/702)
The Commission has concluded that the restructuring plan, which covers the five year period to November 2015, is realistic and should enable Air Malta to return to profitability within a reasonable period of time. The Commission was satisfied that the proposed reduction in capacity, which involved Air Malta withdrawing from certain routes, would be sufficient to avoid distortion in the market. The Commission found that, in addition to securing a private bank loan, Air Malta will also contribute to the costs of restructuring by selling land and other assets.
Last Updated (Thursday, 19 July 2012 09:59)