Air Malta (KM, Malta Int'l) is set to undertake a EUR6 million (USD6.4 million) cost-cutting drive following the recent collapse of partnership talks with Italy's Alitalia (AZ, Rome Fiumicino).

The Times of Malta reports the cuts may include layoffs, particularly among flight crew, as well as a freeze on annual wage increases. Aside from flight crews, other departments likely to be affected are ground handling, where existing collective labour agreements may have to be renegotiated. Privatization is also an option.

Given the difficult operating environment Air Malta finds itself in, the Maltese government has ruled out allowing the carrier from going it alone.

As previously reported, with the exclusivity clause in the Alitalia memorandum of understanding now invalid, several firms are reported to have approached the Maltese government over a stake in Air Malta. Aside from Air China (CA, Beijing Capital) and Turkish Airlines (TK, Istanbul New), Pegasus Airlines (PC, Istanbul Sabiha Gökcen) and local Maltese charter operator AirX Charter (AXY, Malta Int'l) have also sussed out the airline, the report says.