Lino Spiteri
Air Malta in tailspin
Can airlines go under? Definitely so. Several have done that, including prized ones like Swiss Air. God forbid and the saints save, but Air Malta can go that way as well. And possibly soon.
Should that happen the stench of acrimony will fill the air. Everybody will be blaming everybody else. But no matter how ferociously fingers are pointed, it may not be possible to put our proud airline together again. With each day that passes, confusion seems to become more confounded.
Last Thursday, The Times reported on an internal memorandum issued to all employees the previous day by the Air Malta CEO, under the pall of a harsh and determined decision by the Airline Pilots Association (ALPA) to strike for 24 hours between midnight of next Friday and Saturday, unless the company and the government moved towards their demands and position.
The CEO called the union’s decision a totally irresponsible action, joining others who are warning of the potential dire consequences of industrial action. He also called for dialogue and indicated the company had been moving some way towards ALPA’s position, such as by setting up a dedicated supplier contracts’ review and cargo as a profit centre, giving it the resources to operate effectively.
He also made what to me was an astonishing statement. The CEO was reported by The Times as saying talks had started with the airline’s four unions last week “to develop a comprehensive restructuring plan”.
Come again? Months ago, the government appointed a foreign firm of auditors and consultants to do just that. After weeks of secrecy, the plan was submitted to the government by the consultants, for which they received €3.3 million, give or take a few cents. That was quite a while ago, following which the government submitted a restructuring plan to the European Commission.
Does the CEO’s statement mean that Ernst and Young’s expensive plan was effectively scrapped, and that a new comprehensive one is to be developed afresh? I had heard the government was not impressed by Ernst and Young’s efforts, though it paid them their fees on the nail. But “not satisfied” did not imply “scrapped”.
Where, in reality, does the restructuring process stand? A draft of Ernst and Young’s plan was leaked to this newspaper in what I termed in The Times as a kite flying exercise. The company was quick to say that many of the details were not correct. What, exactly, is correct?
The mantra that Air Malta will not comment because it does not want to discuss internal matters in public, is rubbish. In a situation rife with speculation, better come clean and be transparent than allow studied leaks to fly about.
For some reason, the new management could not even give essential facts to the unions. The pilots’ union and management met on Tuesday but, ALPA’s president said, management would not clarify how many pilots would lose their job. That mysterious reluctance, long months after the company should have prepared to restructure, was confirmed by the Malta Hotels and Restaurants Association.
While exhorting the pilots’ union to refrain from making industrial threats and taking them, the MHRA criticised the government for keeping most of the interested parties in the dark about the restructuring process.
Amid all this confusion, I fear that the pilots’ union, if they strike and even extend their action, as the union’s president said, in addition to harming their company and its prospects, will set themselves as scapegoats for a mess that has been long in the making through no fault of their own.
It happened, in fact, despite their cooperation in the 2004 memorandum of understanding.
As I write, the union is vulnerable to legal action if it definitely directs its members to take industrial action.
The union has not declared a trade dispute, which legalises industrial action.
It could well be, therefore, that it will be exposing itself and its members to damages liability. (The GWU has been cannier, and has declared a trade dispute, which is being challenged by the airline).
The pilots’ union wields the most industrial power within the company. It cannot use its weight by firing from the hip. Nor by giving the unintended impression that it wants to take over the management of the company.
Much of what the union is saying makes sense and deserves serious answers. At the same time, beating the drum of past failures by management and, more so, the government, will not resolve the present grave predicament or yield hope for the future.
If Air Malta is to be saved, it has to be restructured, with the involvement of the unions who should truly be treated as partners, and not ignored, given sops or dismissed as irresponsible.
Responsibility is a deep and wide word.
The meaning required right now is an all out united effort to determine what needs to be done, and doing it.
Recrimination is a separate matter to be handled at the political level, where the opposition will surely not let the government get away with its full share of the blame for Air Malta’s predicament, in so far as blame there is.
The pilots’ union will walk taller if it steps back from industrial action and threats thereof. It had to do that to be listened, now listened to it is. It should show its strength, knowledge and wisdom at the negotiating table. For the sake of Air Malta, yes, but also for the sake of its members and their fellow workers.
The pilots’ union – in fact, any union – should not become the stooge for the tailspin which Air Malta is in.
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M.O. Micallef
Jul 12th 2011, 14:21
Lino Spiteri...as always, spot on. I am amazed that there are so few comments here.
Anthony Pace
Jul 11th 2011, 10:40
One problem with Air Malta was the seasonal routes. There were routes like Edinburgh, Belfast, Bournemouth , Norwich which were developed but never sustained. They operated for about six months of the year through their subsidiary, Holiday Malta. They did well but eventually were given up to LCC. Why not put up a resistance. At least make some money in summer.
J Farrugia
Jul 10th 2011, 19:25
You mention swissair LS?? who did KM employ after that airline died?? the very person who was responsable for it's downfall.
In 2004 they started a so called restructuring plan but 8years later nothing came about it seems this administration forgot all about KM and woke up in 2010.
Most staff haven't had a pay rise or any incriment since 04 but the pilots and cabin crew both took a nice sum??? who was responsible for that???
Politically opointed Chairmen who know nothing about the industry, again great thinking by Gonzipn.
The list of f up's is so long i'd need a dot matrix printer with 20 boxes of contineous paper.
If ALPA do go ahead then that's it, wont be too much of a hero then will you Domenic.
James Fenech
Jul 11th 2011, 08:29
Pilot's wage is dictated by supply and demand. They were underpaid and were leaving the country.
Does this explain the increment,no need to know who is responsible for that !
Mr ALBERT LEONE GANADO
Jul 10th 2011, 15:46
Some good and responsible comments made and worth reflecting on by LS. I too agree that the pilots will be committing suicide and at the same time putting many tourist related jobs in jeopardy if they strike at this delicate time of the tourist and Maltese vacationers peak season. If this is just posturing for a fairer deal and proper consultation and negotiations in the current climate of total lack of information and transparency by the new Air Malta board then fair enough to protest in order to make the general public aware of their current predicament . However if they persist and carry out their threatened strike they will lose all public sympathy. Not only that but they will compromise their chance of getting a future job for no other airline would touch these striking pilots with a barge pole.
Mr Charles camilleri
Jul 10th 2011, 15:42
Lino you should know but left out the fact that the Pilots persisted in their claim for hefty pay increase even though they knew that Air Malta was in the red. Was that a responsible action? Why are they now putting the blame on e verybody now for the present state of the Air line.????????
Alfred Fenech
Jul 10th 2011, 11:20
Mr. Spiteri, its a Mickey Mouse country. There's lots of greed but little responsability. Quite a few of us
can claim to say .. MEA CULPA.
Alfred Fenech
Jul 10th 2011, 10:58
Air Malta is suffering from appointing incapable CEOs for a triving airline, The CEOs who did blunders should be brought to book and shamed. We hear that a CEO worked without a salary did well, of others well paid whilst the company went broke. We hear of profits being done while company is
going under. No wonder the Pilots and staff are up in arms. Now according to some wise decision, many will be loosing their jobs. But no problem. Its not under a Maltese CEO but a foreigner,
Mr Fenech is quite right. Now we can blame it on an outsider. We had a magnificent airline. What a shame.
Marika Doublet
Jul 10th 2011, 10:20
Sad situation! I worked for foreign airlines some years ago and have gone through the process of being made redundant. Many foreign scheduled airlines operating to and from Malta have been through the tough times, packed up and left. British Airways sent a representative over to Malta and in a brief meeting had informed the staff that it wasn't lucrative any more to operate from Malta, even though the BA office sold flights to their full capacity and earned enough profits to keep the route running and pay local salaries. However shorter routes ex. london-brussels were more profitable. This after privatisation, take over of a highly overstaffed British Caledonian and massive layoffs worldwide. I believe it was 35,000.
Then there was Air Europe venturing into scheduled services and very promising..the Gulf crisis, higher insurance and fuel prices..and it had to pack up. Then Swissair...a veerrryy good product with high standards and excellent system/staff conditions in place..It also attempted restructuring and forming what was known as the STAR allliance with other airlines. Younger top management with no ties with the past...hearsay of mismanagement of funds etc etc.. and a wonderful, stable airline, toppled as well. Local staff were first given one year contracts as opposed to their permanent contracts..then..nothing.
Other airlines that operating from Malta...Sabena, Alitalia...Libyan Arab Airlines...off the went and local staff were left to look for new jobs. On several occasions I wondered about airmalta's situation and was glad they registered a profit for quite a while after these situation. The world of airlines is constantly changing and now their ar ethe budget airlines which are very much in demand. Now it's airmalta's turn to steamline staff..It;s hardest on those who started working for thei airline at a young ages and grew to love the product. Free trips was one of the things that attracted people to the job and made them feel special. Very often, that's what airlines do...make you feel special as a member of staff and train you to believe in the product and to excel using their system. Leaving that world is hard...redundancy packages help. Retraining and, yes, professional assistance in changing over to other areas of work. Good luck to all staff at airmalta. They have served us well and the staff were excellent colleagues to have when working with other airlines that needed airmalta to handle check-in, ground handling etc... Good luck to Air Malta in their survival.
One last word...Lufthansa seems to be the only stable, surviving, profitable foreign airline that stayed in Malta...makes me wonder...what's their recipe?
Emanuel Muscat
Jul 10th 2011, 17:12
What is their recipe?
It is german domination via the Bianchi group of companies which brought Vodaphone to Malta and also MIA:what about Lufthansa Technic?
I greatly admire the german work ethic and their discipline but Malta ending up like greece is not nice!
We survived the german bombing in the last war so we will not go down without a fight.
MIA should give a lot of way to ALPA's demands.
If not,we know whom to black list!
Stuart Green
Jul 11th 2011, 00:57
E Muscat.
German domination???
Vodafone (please note spelling) is British and MIA iis owned and operated by the Vienna International Airport Group (VIAG), a whole-owned subsidiary of Vienna International Airport in Austria.
Whatever the wrongs are with regard to the current Air Malta situation, the situation should not be made worse by inacurrate statements or claims, be it here or elsewhere.
MIA has responded in public, via the press, to a number of ALPA's "demands". Maybe the answer to the question raised is not the answer people want to hear...
Emanuel Muscat
Jul 11th 2011, 10:23
@Stuart Green:inaccurate should be spelled with one 'r', please note.
The companies mentioned have been given maltese assets practically free of charge:
Vodafone(former Telecell) was given practically everything free of charge (Telemalta only got 20 per cent of shares by making 9 prime sites available to Telecell),no auction fee for the licence to operate which could have made Malta many millions of liri.
The same happened with Melita:they were given the right to fix their dirty big boxes to people's house facades free of charge.
It seems that all our silver is being given to vultures and masons.