Etihad to buy a large stake in Air Malta

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Following months of speculation, the Times of Malta is today reporting that Middle Eastern airline giant Etihad is set to sign a deal taking a large stake in the Maltese flag carrier, Air Malta.

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The well-connected Times of Malta’s exact statement is that “the [Maltese] government has wrapped up negotiations on the future of Air Malta and will be selling a substantial stake of the national airline to the UAE’s Etihad Airways“.

Given the fairly desperate financial position of Air Malta, and the service levels provided as a result, this is an injection of cash and infrastructure that should be roundly welcomed.

The inevitability of this transaction was reported as long ago as December last year, when InsideFlyer analysed in some detail its ramifications. While the precise stake that Etihad is to take remains to be confirmed, it is reasonable to expect it to be pretty much bang on the 49.9% permitted by EU rules. 

In short, Etihad is a high quality, well funded airline that is likely to bring major benefits to the ailing Air Malta. Despite severe cutbacks, the financial position at Air Malta was generally viewed to be unsustainable. As such, the establishment of a stable financial footing for the airline is to be wholly welcomed.

In fact, it is well worth looking at the success the once cash-strapped Italian flag carrier Alitalia has had since Etihad came to its rescue. It’s entirely reasonable to expect similar service level and infrastructure improvements will likewise manifest at Air Malta.

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