newstodate.aero

Nov 04, 2020 (newstodate): The rationale behind Air Atlanta Icelandic's decision to set up a new airline subsidiary in Malta is understood, but with regrets, by the Icelandic Airline Pilots Association, FIA.
   -The situation within the aviation industry is, to put it mildly, catastrophic, and it is clear that we are looking into a very different future landscape. One of the results of the situation is that airlines are understandably seeking every means to reduce cost, whatever the price, writes Heimir Arnar Birgisson, FIA treasurer and member of the Air Atlanta Negotiation Committee, in the latest FIA newsletter.
   -In early 2019, the Saudi Arabian government introduced a custody tax which is approximately five percent of the gross  income of foreign companies working in the country. The tax is levied only on companies from countries that do not have a tax treaty with the local authorities.
   -Unfortunately, Iceland has not negotiated such a treaty. Furthermore, the Icelandic authorities have not made air traffic agreements that include the seventh freedom, enabling airlines to operate between two countries without stopping at the home base, or at least only in a limited capacity.
   -Following a recent meeting with the President of FIA, the directors of Air Atlanta issued a press release stating their intention of achieving an operation license on the island of Malta. The purpose of this is said to be to avoid the aforementioned tax, as well as to be able to enjoy the seventh freedom, which could open doors to some of the largest freight markets in the world.
   -It is safe to state that this plan sounds quite precarious to our members. While we understand that the company is seeking ways to survive in a new reality, it is also clear that this action would open up a gateway to a “flag of convenience” policy, where there is little room for employee rights, the message reads.
   For 30 years, Saudia has been a key customer for Air Atlanta Icelandic that currently operates seven Boeing 747-400 aircraft including five passenger aircraft for the carrier, securing a new three-years aircraft wet-lease contract with Saudia in March 2020.
   In contrast to Iceland, Malta has built up an utmost liberal air services policy attracting an increasing number of airlines to establish themselves with subsidiaries on the island benefiting from the enhanced access to the world markets.