Opposition asks for 10-year solution

Opposition Leader Joseph Muscat said in Parliament yesterday that the opposition would accept no solution for Air Malta that would be for less than 10 years. The least owed to the people after the national airline had been brought to the brink was long-term solutions, not stop-gap measures. There should be consistency beyond any change of government.

At the beginning of his speech he said the opposition was approaching the debate as one that could spell the difference between the life and death of the national airline.

Air Malta was being subjected to EC rules on companies, but the airline was not just another company, neither in the local context nor in Malta’s geographical position. The state could find itself with conflicting roles as shareholder on one hand and policy-maker for economic growth and employment on the other.

Dr Muscat said he was convinced that Air Malta would continue indefinitely because the people needed it and both sides were committed to keeping it in the air. But its long-term survival, beyond the rescue package and restructuring plan, would depend on learning to use available tools better than ever before. As history developed, this role would be more crucial than ever.

The only way to describe Air Malta was as an act of strategy that had developed over the years. If Malta had not had its own national airline the economy would have developed differently.

The airline had never received any subsidies from the state, but always contributed through taxes, dividends, relinquishment of property to the state, staff training and new classes of workers which would have been unthought-of in the past.

Dr Muscat said Air Malta had opened new horizons to at least two generations of Maltese in new careers which had even seen them finding employment with other airlines. Its successful history had led to important investment in Malta in relation to aircraft maintenance.

Minister Fenech had mentioned past decisions that might not have helped Air Malta. There had actually been decisions that had obstructed Air Malta, he underlined.

Through the years Air Malta had always had its particular challenges. They had not started with low-cost airlines. Before these there had been charters at a time when Air Malta had still been seeking to stand on its own feet. They had been enormous challenges, not made easier by schemes offered by the government to operators.

Dr Muscat said that during the upcoming restructuring it would be crucial to keep a re-dimensioned Air Malta that would eventually grow further.

He disagreed that low-cost carriers had been the main cause of the airline’s problems. The main cause had been the strategy which the government had used to open up to the low-cost carriers. The opposition had been made to look as if it was against low-cost airlines, but this was not true.

The government had seen its way clear to helping low-cost carriers, but it seemed the only airline that could not easily be helped was Air Malta.

The airline’s workers had hardly been mentioned so far. They had paid dearly for others’ mistakes and carried the burden like no others. In the 2004 memorandum of understanding they had given up some Lm10 million, or Lm6,000 per head. While the middle to low ranks had worked with frozen packages, other managers had kept receiving performance bonuses.

Dr Muscat said the only times the government had asked the opposition to come on board was at times of difficulty. The opposition had always responsibly decided to help, and so it would this time. It would be around the table to ensure that aims were reached.

Did the government need consultants three weeks ago to tell it what to do? What had it been getting from its own consultants in 23 years? Basics were not being seen to, especially by well-paid people in senior management positions.

The situation was not the result of last summer or last year, but cumulative over a number of years. Two-and-a-half years ago the airline’s workers had been promised job security, at a time when the Prime Minister had already been well aware of the situation.

The economy needed to continue to grow with Air Malta’s help. Many had ideas of how to turn the airline around so that it would continue to be an important economic tool.

EU rules must be obeyed, but Malta could not afford an airline for appearances’ sake.

Dr Muscat agreed public service obligations were not the final solution but only part of the equation on certain routes and services offered by Air Malta. It was the only commercial carrier in Europe still carrying stretcher cases and incubators.

Air Malta’s services were still crucial to Malta, as were cargo services. Low-cost airlines carried only passengers, while most private investments in Malta were based on just-in-time delivery with Air Malta and other legacy carriers.

No island state could afford to have a national airline that was not under the government’s control. Although there had been cases of successful privatisation, there had been others that had not been in the country’s best interests. Common sense must prevail.

Concluding, Dr Muscat said the opposition was well aware of the gravity of the situation. There would be other occasions to speak about why things had got to this stage. But this was a moment for both sides to pledge that the solutions to be looked at would be longer-term to keep Air Malta strong and healthy.

Winding up the debate, Minister Fenech said that the aim of the Bill was to make Air Malta viable. It was everyone’s intention to protect the Maltese economy’s best interests.

The government had always adopted a strategic policy on low-cost carriers that did not compete directly against Air Malta. Low-cost carriers that were directly competing against the national airline only operated from Italian and English destinations.

The minister said that employees’ sacrifices were appreciated. He augured the necessary balance would be found in the coming days, rather than each side blaming each other for past decisions.

Air Malta needed to change the way it was being sold commercially. Changes were needed from top to bottom.

Memos to control expenditure had been issued. While several entities sought sponsorships, Air Malta needed to maximise its resources, ensuring that each euro was well spent.

Mr Fenech said since the market had changed, the company needed to adapt to it. This was not an issue of prolonging the agony. Evaluations needed to be wide in all the company’s aspects. Air Malta was an important catalyst in cargo carriage, while low-cost carriers did not offer this service.

The aim was that Malta would have its own airline operating.

Speaking on the restructuring plan, Mr Fenech said there were times when losses had amounted to €8 million, but the increase in the price of oil and the sterling crisis had forced Air Malta to reduce its fares to attract more people.

Together, the parties should find the needed solutions. Unions had also been asked to be part of the committee to analyse Air Malta’s restructuring plan.

Concluding, Mr Fenech said that the government wanted to keep its majority shareholding in Air Malta to retain its primary vocation towards Malta. While the main aim was to sustain the airline to keep operating, the next step would be to discuss growth.