The European Commission’s approval of the government’s five-year restructuring plan for Air Malta should ensure that the process of giving our national airline a new lease of life will continue. No business restructuring process is ever complete. The dynamics of the airline industry are changing continuously with the advent of new and more efficient operators who try to carve out a share of the market.
The recapitalisation of Air Malta with an injection of €130 million by the State is just one aspect of this restructuring process. The most painful phase of this restructuring was undoubtedly the shedding of hundreds of workers some of whom had been working with the airline for a few decades.
This was an inevitable step if Air Malta was to stand a chance of meeting the challenges of the ‘lean and mean’ low-cost airlines that have become formidable competitors in all travel markets.
It is now important that the workers who have been shed by the company are helped to integrate again into the labour market. This exercise has been done successfully when other public entities, like the shipyards, were restructured.
The details of the restructuring plan still need to be made public. Only then can one understand whether the conditions tied to the recapitalisation of Air Malta are likely to have an impact on our tourism industry that has always been dependent on the seat capacity made available by our national airline.
The rebranding of Air Malta was an important element of the restructuring process to draw a line under the airline’s loss-making recent past.
It is a shame Air Malta is sometimes involved in controversies that do its public relations no good. The political debate on the purchase of Avro aircraft many years ago, as well as the Airline Pilots’ Association’s disagreement with the rebranding exercise, have not helped the airline’s task.
Perhaps the most challenging aspect of Air Malta’s restructuring is the upgrading of the airline’s operations to ensure it can operate profitably in a very competitive market where low-cost competitors have proven experience of operating viably throughout Europe.
Profound cultural changes will be needed to ensure that airline’s remaining workers adopt a new mindset and embrace flexible work practices that are critical factors for restructuring to succeed.
Air Malta has had its fair share of industrial relations unrest in the past. One can also understand that the airline’s workers may be suffering from low morale as a result of experiencing several months of uncertainty about their future, though the rebranding exercise should have helped in that regard.
The pilots’ union has also expressed concern over how the airline is managing its business relations with Malta International Airport and the pricing of some of its commercial services, such as cargo transport.
It is crucially important that both the management and the unions invest more in building mutual trust .
Hopefully this can happen now that the pilots’ association has reached agreement with the airline on the collective agreement, though we still await details of that.
Many years of hard work are needed before one can truly claim that Air Malta has been saved. The cautious optimism expressed by the airline’s heads should be considered more as an omen based on hope for the future than a conviction that the worst is now over.
The road to commercial viability is still a rough one for our national airline, but at least it now has a much better chance of success.