It’s a big day for aviation in Malta… sort of. From one day to the next, Air Malta has ceased operations after over 50 years, and has been replaced by KM Malta Airlines. Why? Well, mainly to get around European Union restrictions regarding limits on state aid.
Air Malta ceases operations due to too much government aid
Air Malta has stopped flying as of March 30, 2024. For context, Air Malta was Malta’s national airline since 1973, operating a fleet of Airbus A320-family aircraft to Europe, North Africa, and the Middle East. The government of Malta viewed the national airline as an important part of the country’s economic strategy, by providing direct links to and from the country.
Unfortunately Air Malta has been exceptionally unprofitable — the airline has lost money for a couple of decades. Amazingly enough, the government of Malta was happy to keep pouring money into the airline, but there was one major issue.
European Union regulations require that if companies receive government aid, they must become commercially viable within 10 years, and the government can’t inject more money into those airlines within that timeframe.
In the case of Air Malta, the airline received government aid in 2012, and then it ran into financial difficulties again in 2020. Malta had asked the European Union for permission to invest another €290 million into the airline as a final effort to make it profitable. Malta’s government proposed a five year plan, with the goal of the airline being profitable by the end of it.
That was ultimately rejected, but that hasn’t deterred Malta from its goal of maintaining a national carrier.
KM Malta Airlines is Malta’s new national airline
Air Malta ceased operations on March 30, 2024, and KM Malta Airlines launched operations on March 31, 2024. What’s different between Air Malta and KM Malta Airlines? Perhaps most significantly, this allows Malta to skirt European Union regulations regarding state aid.
Beyond that, KM Malta Airlines looks mighty similar to Air Malta. KM Malta Airlines has launched operations with eight former Air Malta Airbus A320-family aircraft. The airline has around 400 staff, almost all of which are former Air Malta staff.
Perhaps we’re seeing a slight strategy shift with KM Malta Airlines, as the airline is adopting a strategy of focusing on key European markets, linking Malta with the main capital cities in Western Europe (with no initial service to North Africa or the Middle East). KM Malta Airlines even has a codeshare agreement with Lufthansa Group, allowing the airline to connect into the long haul networks of airlines like Lufthansa and SWISS.
For the summer of 2024, KM Malta Airlines is serving 15 European cities, comprised of Amsterdam (AMS), Berlin (BER), Brussels (BRU), Catania (CTA), Dusseldorf (DUS), London (LGW & LHR), Lyon (LYS), Madrid (MAD), Milan (LIN), Munich (MUC), Paris (CDG & ORY), Prague (PRG), Rome (FCO), Vienna (VIE), and Zurich (ZRH). In the summer of 2024 schedule, the airline is selling 1,430,000 seats, operating 284 weekly flights, and has an average aircraft utilization of just over 12 hours per day.
Bottom line
Air Malta has ceased operations, and has been replaced by KM Malta Airlines. This is because Air Malta had been losing money for years, to the point that the airline was violating European Union regulations regarding state aid. With the airline basically being forced to shut down, the government of Malta is now launching a new airline, which looks quite similar to the old one.
The government of Malta insists the new airline will become profitable within a few years, so let’s see how this plays out…
What do you make of the airline situation in Malta?
