Around 20 Air Malta pilots have been offered an early retirement package amounting up to €450,000 each as part of the airline’s bid to drive down staff numbers, The Sunday Times has learnt.
Scheme was also designed to reduce the overall operating costs- Air Malta
Sources said the pilots aged over 50 with more than 20 years of service have received a letter from the airline’s management with this “one-time offer” for early retirement. The airline currently has 130 pilots and wants to reduce the number to 110.
The airplane captains were offered two-thirds of their salary until their retirement age.
Some pilots retire at 63 while others retire at 65.
Rough calculations conducted by The Sunday Times reveal that pilots stand to receive between €370,000 and €450,000 each, depending on their salary.
If pilots opt to take the payment in the form of a lump sum, they will receive a smaller figure overall.
Pilots can opt to receive a sum over a period of time, which could also include monthly payments. According to the collective agreement, early retirement or golden handshake payments are tax free.
In the letter, the pilots were told that the early retirement package was being offered as part of the collective agreement which it had reached with pilots last year.
However, the take-up was slow so the management is proposing what it describes as an improved package.
The early retirement scheme is similar to that offered to other airline employees, including engineers, and pilots were “next in line”, sources said.
Pilots have until Friday to decide whether to opt for the scheme. It is unclear what Air Malta plans to do if the take-up is, once again, unsatisfactory. Sources said some of the pilots involved were seeking clarifications on details of the package before making a decision.
While confirming the early retirement scheme, a spokesman for the airline said the offer was not a golden handshake and was planned to bring the number of pilots required for the operation down to 110.
He added that during the negotiations on the latest collective agreement, the airline and the association had agreed that the early retirement scheme was one way of bringing down the number of pilots to the required levels.
“The number of pilots that will be permitted to take up this scheme is at the sole discretion of the company and will be determined by the number of pilots required to operate the Air Malta flight schedule.
“Air Malta is committed to push forward its transformation into a profitable airline that contributes positively to the economy of Malta and this scheme was also designed to reduce the overall operating costs,” the spokesman said.
Questions related to the monetary aspect of the early retirement scheme remained unanswered.
Last year, the airline reached a deal with the pilots’ association on the new collective agreement covering the period January 2012 to January 2015. The new agreement will see the airline’s total salary bill for pilots increase by €4.5 million during this period.
Pilots will receive a rise of 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.
A pilot previously earning €54,600 would end up earning €72,400 after four years as opposed to €59,200. Similar increases were given to first officers.
Through a revised scaled system, pilots and first officers’ salaries will be upgraded each year but will be capped at €90,800 for pilots and €58,200 for first officers.
Moreover, according to details of the agreement revealed by The Times in October, 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.
mxuereb@timesofmalta.com