The Maltese government is planning to shut down Air Malta and establish a new national airline straight away, a plan that is set to be complete by the end of 2023.

According to David Curmi, the Executive Chairman of Air Malta, the plan to dissolve Air Malta and open up a new Maltese carrier is in its final stages. “We are nearing the end of long, difficult, and complex discussions with the European Commission, which did not want a photocopy of Air Malta. We showed the commission that we mean business,” Curmi stated during an interview with Times of Malta.

Curmi also pointed out that while the transition will be “seamless” for passengers, all 330 of the current employees working at Air Malta will have to re-apply to for roles at the new airline.

Several previous reports from outlets in Malta, including the Times of Malta and The Shift, stated that the European Commission (EC) would not allow the local government to inject €290 million ($318.2 million) to save the ailing Air Malta. This led the carrier to decide to start again with a new national carrier, with Curmi adding that the airline has a “five-year business plan” and was “close to concluding on that”.

“The new airline will not be competing on price but on service. This will be our competitive edge,” Curmi added.

Malta is also home to Malta Air, a subsidiary of low-cost carrier Ryanair. Irish airline’s Chief Executive Officer (CEO) Michael O’Leary told The Malta Independent in September 2022 that Air Malta was too small to survive.

In 2010, the Maltese government notified the EC that it wanted to grant a loan of €52 million ($57 million) to ensure the survival of Air Malta, with the commission approving the aid. A year later, in May 2011, the government once again asked the EC to give permission to grant the flag carrier a capital injection of €130 million ($142.6 million), which the EC eventually approved on June 27, 2012.

This is not the first time that the EC’s decision not to grant permission for state aid has resulted in a freshly formed airline in the European Union (EU). The Italian government replaced Alitalia with ITA Airways on October 15, 2021, the same day that the former flag carrier shut its doors, while the Estonian government replaced Estonian Air with Nordica in November 2015.