Finance Minister Clyde Caruana is awaiting a crucial EU decision on Air Malta’s eligibility for state aid before giving a breakdown of the public sector jobs at which pilots made redundant last year are currently employed.
A spokesperson for Caruana told Lovin Malta that the minister doesn’t want to comment on issues related to Air Malta until a state aid decision is taken, a decision that will define the future of the national airline.
In June last year, 69 Air Malta pilots were sacked following the failure of negotiations between the government and the pilots’ union ALPA over salary cuts in the wake of the COVID-19 pandemic.
However, they were informed in writing by the Economy Ministry, which was politically responsible for Air Malta at the time, that they were guaranteed a government job at the same take-home pay as that agreed upon in their most collective agreement.
The Ministry didn’t specify in the letter exactly what jobs will be on offer, only stating that their job contract will be valid until the end of 2022.
It is unknown how many of these pilots accepted the offer.
This was thanks to a side agreement that then Tourism Minister Konrad Mizzi and ALPA had signed in January 2018, safeguarding pilots from lower salaries in the eventuality that the airline would make them redundant.
Obviously, no one could have predicted back then that COVID-19 would strike the world and devastate the travel industry the way it ended up doing.
Still, it’s a not-insignificant expense for the public purse – according to the collective agreement, salaries range from €24,000 for new junior first officers to €109,000 for experienced captains, excluding bonuses and allowances.
Depending on how many pilots accepted the offer, the cost to taxpayers could therefore be expected to run into the millions.
However, last January ALPA warned in court that some former Air Malta pilots who are now employed with the new government airline Malta Med Air have been made to work in “precarious” conditions.
Meanwhile, negotiations with the European Commission on state aid will continue, with Clyde Caruana arguing cash injection from the government is crucial if the airline hopes to make it out of the pandemic in one piece.
In a recent interview with Lovin Malta, Air Malta executive chairman David Curmi said he expects the EC to attach certain conditions to state aid which could see the airline shrink in size and start outsourcing certain services.
“Given the size of Air Malta’s operations and the fact it only has eight aircraft, its structure is much larger than it should be so at some stage, we’ll need to right-size and transfer most of our fixed costs into variable costs,” he said, estimating the airline’s annual payroll to currently stand around €50 million.
“Right now we have a lot of costs to pay whether we fly or not, and I’m trying to transfer a lot of those fixed costs into variable ones, which means if we fly we pay, but if we don’t fly we don’t pay.”
“This means we need to outsource some services – we must shrink and come down to the right size to make Air Malta sustainable and less dependent on its main shareholder (the government) for significant funding.”
Cover photo: Air Malta