Air Malta freebies set to be reviewed

All Air Malta freebies, including free flights to politicians, are to be reviewed as the ailing national airline's restructuring process takes off.

At its first meeting last week, the airline's new board decided Air Malta could no longer afford to give out handouts, chairman Louis Farrugia told The Sunday Times in an interview appearing this weekend.

"The whole system is under review. But a decision has been taken. We won't be able to pay for them, especially once workers are being asked to make sacrifices. It doesn't add up," Mr Farrugia said in his first interview three weeks since he assumed his new post.

The lucrative concessions are expected to be discontinued as part of a comprehensive cost-cutting exercise to put the national airline back on a sound financial footing.

Although the concessions had been in place for a long time, some since Air Malta's inception, different administrations extended them to politicians, politically appointed directors and their immediate families.

Mr Farrugia said the government was " aware" of the board decision and dismissed suggestions that it could veto the initiative.

"I think the board members deserve respect, in that they're not puppets. We have to take the right decisions for the airline. The Prime Minister was very clear with me that this was my role," Mr Farrugia said.

Air Malta CEO Peter Davies said in the last 10 to 12 years several airlines had woken up to the fact that it was difficult to make profit in this business and had cut down on free flights.

Staff are still expected to benefit from discounted flights but the quantity and quality of perks might be reviewed. For example, Air Malta's general managers and their families are entitled to four free club class tickets a year and an unlimited number of club class tickets at a discounted rate of € 10 each way, excluding taxes.

The list of beneficiaries has grown along the years. Unlimited free or discounted travel facilities were extended to all those who occupy, or have occupied, the post of President of the Republic, Prime Minister, minister responsible for Air Malta, chairman, company board members and various company consultants.

Parliament had also introduced a scheme a few years ago entitling former MPs to two free air tickets every year, this time paid through a special budget reserved for ex-MPs. According to Parliament, 43 of the present 95 former MPs made use of this scheme last year.

A decision for MPs to receive a €1,500 travel allowance instead of four free Air Malta flight tickets per year last January had been reversed.

Last November, the EU gave the green light to the government to extend a €52 million rescue aid to enable Air Malta to remain afloat. The aid was granted on condition the company starts a thorough restructuring programme aimed at getting it back on a sound footing.

During the interview, Mr Farrugia and Mr Davies discuss several aspects of the restructuring process, including staffing and projections. Only yesterday, workers from Air Malta's subsidiary, Selmun Palace Hotel, were made redundant.