Updated: Adds details on the two meetings held today
Talks on the future of Air Malta kicked off today with a meeting at San Anton between the government and the Opposition, presided by President George Abela. Finance Minister Tonio Fenech led the government delegation, while Joseph Muscat headed the Opposition.
The meeting was held at Noon and lasted some three hours.
Informed sources said the meeting was held on the initiative of the Finance Minister, who asked the President to chair it. The news that the meeting was held was announced by the Labour Party.
Dr Abela, as an industrial relations lawyer, had been involved as a mediator in another Air Malta restructuring exercise in 2004.
The meeting was followed, almost immediately after, by a 35-minute meeting between Mr Fenech, airline chairman Sonny Portelli and a GWU delegation led by General Secretary Tony Zarb.
As he emerged from the meeting, Mr Zarb said the meeting had focused on how the consultation process would be consulted, and the government did not present its proposals. A meeting with all the trade unions that represent the airline's workers will be held tomorrow.
The government is seeking EU approval to give financial help to the state carrier.
Informed sources told The Sunday Times yesterday that Air Malta could not survive unless it shed staff. Brussels would never permit state aid to subsidise unproductive jobs, the EU sources said.
Today's meeting marks the start of a series of meetings by Mr Fenech with the stakeholders, including the unions.
The GWU has insisted that the workers should not be blamed for the state the airline is in. It has also insisted that the workers were burdened with enough sacrifices in previous efforts to restructure the company.
The government has notified the European Commission of its intention to grant Air Malta urgent rescue aid which would then be followed by restructuring aid. Any aid has to be tied to a restructuring and downsizing programme agreed with the EU Commission.
The government is opting for the state aid route after the commission refused to accept a proposed €100 million injection into Air Malta’s shareholding capital.
The EU’s rules also stipulate that Air Malta can only benefit once from state aid – if the restructuring programme fails, no further aid from public coffers would be allowed, meaning the company could be wound up.
It is not known how many of its 1,300 staff members the airline will need to shed though sources said the government would be discussing this issue with the unions.
Within two months of state aid approval, the government will have to submit its restructuring plan. If the commission is not satisfied with the plan, it could pull the plug on the aid.
The restructuring programme is not expected to have an impact on Air Malta’s operations and schedules for the time being.
Sources close to the Finance Ministry expressed hope that all those concerned acknowledged Air Malta’s challenges and that unless the government can go to the commission with a viable restructuring programme, the country may risk losing its national carrier.
Despite a restructuring plan in 2004, Air Malta failed to prosper, amid major fuel hikes and competition from low-cost airlines. Losses this year are expected to exceed the €31 million deficit registered last year, with the company even reporting losses during summer, despite a record-breaking tourism year.