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 From one day to the next, Air Malta has ceased operations after over 50 years, and has been replaced by KM Malta Airlines.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.
In this post:
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?
It used to be great airline, but I didn't fly it recently. Still, had very good memories from their service and standard.
I happened to be on one of their last flights (28 March) and the service was excellent, both food and the crew.
@Lucky: Do you know anything about the possibility to earn/spend miles on KM Malta Airlines flights? For instance, Miles&More still shows that miles can be earned/spent on Air Malta, which is the now defunct airline …
I don't get the government's strategy; it already has a joint venture with Ryanair, i.e. Malta Air.
Lucky, as a frequent flyer blog, you’ve missed something interesting here.
The old Air Malta “Flypass” program died with Air Malta, but unlike when other airlines fail and the frequent flyers get nothing, Air Malta actually paid out all Flypass members (even those without status) for their miles at the ratio of 1 KMile = €0.0047c.
That means (very approximately) for every business class ticket you had miles for, you were paid out...
Lucky, as a frequent flyer blog, you’ve missed something interesting here.
The old Air Malta “Flypass” program died with Air Malta, but unlike when other airlines fail and the frequent flyers get nothing, Air Malta actually paid out all Flypass members (even those without status) for their miles at the ratio of 1 KMile = €0.0047c.
That means (very approximately) for every business class ticket you had miles for, you were paid out appro €200. Nothing wrong with that!
Unique in the world of ‘failed airlines’
Will the food and presentation still be the same as it was? I'm guessing not much change there, so we will see. To be fair, for intra-European business class food, they were a bit above average, so if it ain't broke...
The airline is a billboard for the island. It doesn't need to be profitable.
Under European Union rules, the government cannot reimburse its losses indefinitely. This isn’t the Middle East.
Yeah, in Europe you have to copy/paste everything to a new legal entity to achieve the exact same thing, that’s why Europe is better than the Middle East
No, it's not. One good Ryanair sale makes far more for tourism than "flag carrier" does in a year. Most people don't have an idea that Air Malta exists, and that includes visitors to the island.
Air Malta had a shockingly good (and cheap!) business class product, I kinda hope this will be the same on KM. Upcharge can be as little as 30-50€, which is worth the usual perks alone, and on top of that food is absolutely awesome and crews very proactive with refills. I can't wrap my head around governments willingly pouring money into black holes called "national carriers" when there's plenty of other airlines willing to cover...
Air Malta had a shockingly good (and cheap!) business class product, I kinda hope this will be the same on KM. Upcharge can be as little as 30-50€, which is worth the usual perks alone, and on top of that food is absolutely awesome and crews very proactive with refills. I can't wrap my head around governments willingly pouring money into black holes called "national carriers" when there's plenty of other airlines willing to cover the market, but I guess if it means their taxpayers subsidize my journeys, why not :)
Also a small note about semantics: "Malta asked European Union" is a bit of a nonsense, since Malta is part of the EU so they would be asking themselves. You wouldn't say that New York asked United States for something, but rather that it asked the federal government or whatever institution. Same applies here, I assume the request went to EC (the executive body of the EU, equivalent of the US federal government).
New York asks United States for all sorts of things