Government ‘guarantee’ for Airmalta

By Kurt Sansone

Government does not intend to subsidise Airmalta’s increased insurance premiums but it has agreed to provide the necessary guarantee in the eventuality of third party claims following a hijacking or terrorist act.

Economic Services Minister Josef Bonnici told The Malta Financial and Business Times that following the September 11 terrorist attacks the airline industry, including Airmalta had to contend with the decision by insurance companies to impose a capping on the maximum liability they are ready to cover in the eventuality of third party claims.

Increased insurance premiums and the decision to impose the maximum liability for terrorist attacks have hard hit airlines all over the world.

Prof. Bonnici added, "As has happened in most other countries, the Government of Malta has intervened to provide the necessary indemnity cover in support of Airmalta." However, he added that there was no intention to subsidise Airmalta because of the increased insurance premiums.

Minister Bonnici added that government was closely monitoring developments. He explained that Airmalta and the Malta Tourism Authority have set up a committee specifically to monitor closely the developments in the travel and tourism industries as they unfold.

When asked to what extent government will consider helping Airmalta if the need arose, Prof Bonnici said that government will re-assess the situation as necessary. "At the moment matters are still very fluid although present indications would seem to show that Malta is being perceived as a ‘safe destination’ which should help, in no small way, to limit the negative effects of the international downturn in air travel," Prof Bonnici reiterated.

Last week, Airmalta chairman Louis Grech told The Malta Financial and Business Times that the airline was rationalising its operations in a bid to cut down on costs. Mr Grech also reaffirmed the airline’s policy not to lay off workers despite the difficult situation.