VALLETTA, Jan. 14 (Xinhua) -- Air Malta, the country's flag carrier, will reduce the number of employees by half as the government plans to make the airline financially viable, Finance Minister Clyde Caruana said here on Friday.

The airline currently has 890 employees, and the plan is to offer around 470 of them jobs in other government sectors with the same conditions and salary.

The move, to be completed by this summer, is expected to save the airline around 15 million euros (17.1 million U.S. dollars) per year, Caruana told a press conference.

The restructuring plan was unveiled as the government awaits the European Commission's final decision on how much in state aid it can inject into the airline.

The plan also foresees the negotiation of new collective agreements to allow the airline more flexibility and to introduce new and sustainable operational practices.

Caruana said the cost-cutting plan will see the airline close its ground and baggage handling operations, which alone employ 300 people. Another 110 administrative staff will also be transferred to other government sectors.

Air Malta will cut unprofitable routes and will attempt to operate flights that would not land in Malta. Caruana said these changes were needed to save the airline, which has racked up over 258 million euros in operational losses since 2005.

"We have made strong arguments with the European Commission that Air Malta has a fighting chance, and we believe that our plan will save the company from bankruptcy," he told the news conference.

"We have to be serious about this plan. It could very well be Air Malta's last chance," he added.

Plans for Air Malta to fly to airports on other continents, for example to New York or Mumbai in India, have been ditched.

Air Malta has had a negative equity since 2011. In 2012, the EU cleared a 130-million-euro state aid restructuring plan for the airline, but it was soon eaten up by the rising costs.

The COVID-19 pandemic dealt a major blow, with the airline receiving over 300,000 requests for refunds totaling 32 million euros and issuing 80,000 flight vouchers, equivalent to 12 million euros.

Although the Mediterranean island country's economy is heavily dependent on foreign trade and tourism, the Central Bank of Malta has predicted last December that the country's gross domestic product (GDP) will grow by 6.5 percent in 2022 and 5.3 percent in 2023, higher than the previous forecast. (1 euro=1.14 U.S. dollars)