Air Malta will transfer half of its workforce in an attempt to survive, Finance Minister Clyde Caruana has announced.
Caruana told a press conference that Air Malta currently employs around 890 people and that this must be shedded to around 420 or 430, with cuts to cargo handler, cabin crew and administrative workforces.
A scheme will be held to transfer all of these workers to other government departments, with the minister stating that they shouldn’t pay the price for poor political decisions to inflate Air Malta’s workforce.
Caruana blasted his predecessors, who he didn’t mention by name, for a series of poor business decisions at the national airline.
“The company is in the state it is currently in because political decisions triumphed over common sense,” he said. “This means that over the years, Air Malta suffered losses and burdens it could have easily done without.”
In particular, he harshly criticised a past strategy, launched under former Tourism Minister Konrad Mizzi, for Air Malta to open new routes to faraway destinations such as Mumbai, New York and Accra.
“The first decision David Curmi took after he was appointed Air Malta executive chairperson was to rationalise its flight network. Air Malta was exploring new routes, which burned it at least €40 million, money the company only had in the first place because it had sold its assets.”
“The time of experimentation and doing things that will only burn money is over.”
Plans for Air Malta to lease two planes to fly to those destinations have therefore been scrapped, and it will now lease two new planes to fly to European airports – at an even cheaper rate than the airline’s current planes are leased at.
He said that while the European Commission will allow Air Malta to benefit from some kind of state aid, he doesn’t expect this to be a large amount.
“To dismiss rumours and speculation, I wouldn’t be delivering this press conference were I not certain that Air Malta has a fighting chance for a future,” he said.
“I wouldn’t come here and try to sell something that I know cannot happen. I’m not saying that it’s going to be easy but I’m not going to fool company workers by stating something that I know cannot happen.”
Caruana admitted that Air Malta’s credibility took a hit in Brussels as a result of failed promises, and that the European Commission had wanted the airline to go the way of Italy’s former flag carrier Alitalia – ie. Closing the company down and transferring its operations and assets to another state company.
“I told them that I disagree with this decision because Alitalia faced significant problems went it went down this path, because Air Malta’s situation isn’t as precarious as Alitalia’s was and because I still believe there’s a chance to save Air Malta.”
“[European Commissioner] Margrethe Vestager told me straight out that the EC had lost trust in Air Malta because it hadn’t delivered on many promises it had made since 2010 and asked me why she should take me seriously. She was right; had things been done years ago, I wouldn’t be announcing these decisions today.”
“However, in November, Vestager said she noticed significant improvement under David Curmi and confirmed this week that she was very satisfied with the changes.”
Caruana said he intentionally didn’t delay this decision until the end of the upcoming general election.
“That is how the public loses trust in its politicians, when we aren’t man enough and mature enough to announce important and sensitive decisions due to the electoral cycle,” he said. “This goes beyond any political calculations; it is a strictly business-related decision to safeguard the interests of the nations, families and public funds.”
What do you make of this decision?