Industrial relations at Air Malta

News that the European Commission has given the go ahead to the government’s financial plans regarding the restructuring of Air Malta should have been greeted, one would have thought, with relief all round. Without a fresh financial injection the national airline would not survive, even if the restructuring turned out to be a perfect exercise.

Instead it elicited a very loud blast from the president of the pilots’ union, plus criticism by the cabin crew union. That also came in the wake of earlier official reports that the restructuring plan is proceeding apace and that the airline should break even, ­presumably other things remaining equal, within two or three years.

That particular news did not draw much of a reaction from the unions. It was therefore surprising that the EU decision triggered the blast. What, exactly, is happening?

Air Malta’s management says that measures at the heart of the restructuring programme are being implemented. That is certainly the case in so far as jettisoning staff is concerned. The pilots’ union, however, obviously feels that other steps pointed out by its president directly to the Prime Minister did not materialise.

The management is not in agreement. It pointed out, more sotto voce than with apparent intent to enter into fresh controversies, that new arrangements had been worked out with the Malta International Airport company, but details could not be given. The company had other customers besides Air Malta and would not wish to reveal commercially sensitive information.

That is a double-edged reply. It is true on the one hand, dicey on the other. Operational information can be sensitive and airline competition, not least with the advent of low cost airlines, has become cutthroat. On the other hand this stock reply can be a façade. It would make more sense to take the unions into the management’s confidence, strictly on a need-to-know basis.

That, in fact, is what seems to be missing from the restructuring plan and all that surrounds it. I for one had been lulled into a false sense of security. I thought that the fact that union-management silence had broken out meant that timely discussions were being conducted behind the scenes when needed. That does not seem to be the case. The airline pilots’ union president, among other things, lambasted management on other factors beside the airline’s relationship with Air Malta.

These included an old allegation that cargo handling was not economically priced, to the detriment of Air Malta. Good relations cannot mean that there will be agreement on every single point raised by the unions. Yet disagreement has to be justified. Keeping an open line with the unions is best practice in any company, at any stage, let alone one the relative size and importance of Air Malta, and the problems it has been passing through for myriad reasons.

That lines open to the desirable effective extent do not exist as much as need be was confirmed by the cabin crew union. In its reaction to the Brussels conditional go ahead, the union observed that cabin crew had been shed, only for management to go on to recruit new cabin crew. Unless there is a very valid reason for doing that, such action is puzzling to an extreme. The management owe it to the unions to explain, as clearly as can be.

Good industrial relations are essential for the company to move forward as best as it can. In due time, the expatriate management will leave. Even if it results that they have done a good job while at the helm, they will not leave a static situation behind them. Life is full of challenges. That is true in any sector, particularly so in the airline business.

The current management will be gone. The unions will remain. Even if they, too, eventually see a change of leadership, their role will continue to be essential. Without doubt, the management has to focus as much as can be on the job in hand. That job entails a thousand demands on management. A strong proactive relationship with the unions is one such key demand.

By way of example, that is borne out by the Farsons Group, an entity ably managed as CEO by the present chairman of Air Malta, Louis Farrugia, who has now moved on to the chairmanship of the group. Over the years the group had to pass through not one restructuring, but several. Production techniques change, competition too. For instance Farsons had to face strong competition from imported quality substitutes for their products.

Restructuring under Louis Farrugia became an almost ongoing process, involving much capital investment and risk. Nevertheless, positive results were achieved, more than enough to overcome the growing pitfalls. Throughout Farsons worked in consultation with its unionised labour. I am not aware that any industrial dispute of note arose through it all.

Management-union pro-active cooperation pays. That is a lesson whoever is running Air Malta, hopefully on commercial lines and without political interference, must never forget.