Following months of speculation about a possible tie-up with Etihad Airways (EY, Abu Dhabi International), Alitalia (AZA, Rome Fiumicino) has come forward and announced it has signed a Memorandum of Understanding with the board of directors of Air Malta (Malta International) and the Government of Malta to complete a comprehensive due diligence with the possible intention of becoming a 49% shareholder in the Maltese airline. Alitalia is 49% owned by Etihad.
“There are strong cultural and commercial bonds between Italy and Malta, and this MOU is a first and important step, but we will only make a decision once we have completed an exhaustive examination of a possible deal," Alitalia’s CEO Cramer Ball said. "We will need to establish unequivocally that a deal with Air Malta will not undermine the progress of our three year turnaround programme, or prejudice our financial position."
Ball added that with Alitalia on track to attain profitability by 2017, there was need to consider future plans hence the interest in Air Malta. As such, given Malta's proximity to Italy, Alitalia will study how Air Malta can compliment Alitalia's strategic growth plans especially in areas such as southern Italy.
"The future of the commercial aviation industry has to be one of consolidation, and for us to prosper we must examine opportunities where we believe we can offer a wider reach for our customers," he said.
Air Malta Chairwoman Maria Micallef said the negotiations were at an early stage and the state-owned company would cease talks with other airlines now that an MOU with Alitalia has been signed. The carrier hopes to conclude the due diligence by the end of July, following which the Boards of Alitalia and Air Malta will then make a decision on whether to proceed with an undertaking.
Air Malta currently operates a fleet of three A319-100s and seven A320-200s on flights to thirty destinations in Italy, Germany, France, Switzerland, Russia, the United Kingdom, the Netherlands, Austria, Czechia, and Belgium. It is in the process of restructuring its operations aimed at cutting years of heavy losses. As such, a potential tie-up with Alitalia is expected to ease the Maltese carrier's cost base and increase its overall profitability given access to greater economies of scale.
