Airline seeks lease/purchase deal in four-year rollover as it launches maintenance venture with Lufthansa Technik

Air Malta could decide this week between the Airbus A320 family and Boeing 737 to replace its 13-strong fleet, bringing to an end two years of negotiations with suppliers.

The airline operates four A320s, two 737-200s and seven 737-300s, and aims to roll-over the entire fleet over four years, from December next year. "We are looking into the replacement of our existing fleet with A319/A320s and possibly A321s, or 737-700/800s," says Air Malta chairman Louis Grech. "The aim is to clinch a deal to lease aircraft, with the right to purchase," he adds.

The airline says it is close to finalising its selection and is known to be keen to capitalise on prevailing competitive pricing conditions. Although airline sources suggest that it has decided on an all-737 fleet and concluded a deal with International Lease Finance, Grech denies this. He confirms, however, that Air Malta recently completed a sale and lease back with the US lessor for three of its 737-300s and two A320s, which have been leased back for "a number of years".

Meanwhile, Lufthansa Technik and Air Malta have established a joint venture in Malta in a move by the German maintenance giant to cut costs and expand into the Mediterranean market. Lufthansa Technik Malta, 51% owned by Lufthansa Technik with the balance held by Air Malta, will perform C-checks on Boeing 737s and Airbus A320 family aircraft for Lufthansa, Air Malta and third parties.

Representing an investment of €2-4 million ($1.8-3.7 million), the turnover of the new company, to start next January, is expected to be around €15-16 million.

The joint venture adds to a growing number of European operations set up by Lufthansa Technik outside Germany. Malta's relatively low labour costs - around half of Germany's - are key to Lufthansa Technik's choice of Malta. Third-party work is likely to include C-checks on the 737s of Air Malta's 49%-owned Italian subsidiary AzzurraAir, and possibly Algerian carrier Khalifa, which has a maintenance deal with Lufthansa Technik.

Source: Flight International