Air Malta has agreed to give pilots a raise worth about €4.5 million as part of a collective agreement that was signed away from the cameras and kept tightly under wraps until today.
The Times can reveal the contents of the collective agreement covering the four-year period between January 2012 and 2015, which was kept secret by both Air Malta and the pilots’ association.
Pilots will see their salaries go up cumulatively by more than three per cent every year, apart from the cost-of-living allowance increase, resulting in a total increase of about €17,000 each over the period.
This amounts to a third of what they currently receive.
For example, a pilot who was previously earning €54,600 would end up earning €72,400 after four years as opposed to €59,200, as the old agreement would have stipulated. Similar increases were given to first officers.
Through a revised scaled system, pilots and first officers will have their salaries upgraded each year but these will be capped at €90,800 for pilots and €58,200 for first officers.
The collective agreement also enhances the points-based system called “weighted units” which sees pilots and first officers get additional payment when they are actually called in for duty. This could amount to an extra €5,000 over the four-year period.
Besides this, pilots and first officers have also been given a one-time payment of €4,500
in return for having given up part of their salaries years ago when the airline had begun experiencing difficulties, sources told The Times.
The total cost for all these changes could exceed €4.5 million, but both the airline and the pilots’ union have refused to give official details.
However, Air Malta has also made gains from the deal, recouping much of its new expenditure on pilots’ salaries.
Pilots will now start to contribute €100 every year towards their insurance costs incurred by the company. Meanwhile, Air Malta will pay for the “loss of licence” insurance for pilots only until the age of 55.
Pilots will also give up the current benefit of having both a car park space as well as a chauffeured pick-up every time they are called in. They will now have to choose one of the two options.
But the biggest gain for the airline is better flexibility from the pilots, which will translate into flexibility of Air Malta’s flight schedules, creating many opportunities for savings.
In effect, the company will be able to make more use of its pilots, enhancing productivity.
Due to the capping of the salaries, there is also a chance that older pilots opt for early retirement. This would help bring down the airline’s excessive number of pilots, starting from the highest earners.
The airline currently has about 130 pilots on its books, which is considered to be excessive.
In fact, although the collective agreement could be seen as surprisingly generous in light of the current spirit of austerity, some 15 per cent of the pilots did not approve of it when it was put to a vote last month – these are likely to be the oldest ones.
Air Malta signed the new collective agreement with the pilots on September 24, without informing the press.
A deal was struck a month earlier, in August, when a bitter negotiation process which had reached a brick wall, was solved at 3am after several press statements. At one point, Alpa called for the Air Malta chief to resign while threatening to strike in the height of the summer season.
When contacted for information about the collective agreement, Alpa president Domenic Azzopardi said he had agreed with the company not to divulge its contents.
Air Malta, on the other hand, confirmed that the agreement struck was approved by the airline’s board of directors and Alpa members.
“In recent weeks this agreement was given the green light by Air Malta’s board and ratified by the pilot community following a vote. Following the conclusion of this process, the four-year collective agreement with Alpa was signed a few days ago.”
A collective agreement was also signed with the Engineer’s Association last month and discussions are under way with other Unions on their collective agreements, Air Malta said.
Asked why the signing ceremony and collective agreement were being kept secret, Air Malta said it had always been the airline’s policy not to publicly discuss specifics of any agreement with various entities, including unions.
In reality, signings of such agreements usually take place in the presence of the media, as happened in January 2008.
Asked whether the agreement was fair compared to what was given to other unions, Air Malta said the agreement was negotiated within the same parameters of the discussions under way with other unions.
“The collective agreement meets the requirements of the restructuring plan approved by the European Commission and is in-line with the financial constraints of the airline. Salary increases in the collective agreement are related to productivity and efficiency gains.”
Air Malta also vehemently denied any Government involvement in the discussions leading to the agreement. However, the company pointed out that the Government is represented through the airline’s board of directors.
“As a commercial airline, Air Malta’s management is tasked with managing such discussions in the airline’s best interests.”