Tourism Minister Edward Zammit Lewis will neither confirm nor deny that job cuts will take place at Air Malta as talks continue with the strategic investor, Alitalia.
“The eventual business plan could include changes in this aspect,” he said yesterday when asked whether job cuts were on the table.
Air Malta cabin crew members began following work-to-rule directives after three meetings in one day with Union of Cabin Crew officials failed to yield an agreement between the two sides.
Cabin crew want assurances that their jobs and paycheques will remain unchanged, and say the government's assurances involve collective agreement matters.
The UCC's industrial action came less than 24 hours after the government and Air Malta's pilots reached a peace deal late on Thursday that guaranteed their employment in return for increased productivity levels, Dr Zammit Lewis confirmed.
He would not elaborate on the details of the agreement but insisted it was not the collective agreement. “We agreed to maintain confidentiality, and I have to respect that – but I can say that we agreed on a declaration of principles on very important issues that were of concern for pilots, the government and Air Malta,” he said.
He admitted the talks with Alpa were “long and hard” but pilots were given guarantees on employment.
“On our part, the airline secured an agreement that productivity would increase, which is crucial for it to remain competitive in a very challenging environment,” Dr Zammit Lewis said.
The Airline Pilots Association (Alpa) was at loggerheads with the airline’s management after talks on a new collective agreement were postponed until negotiations with Alitalia were concluded.
Talks with Alitalia over the government’s sale of a 49 per cent stake in Air Malta entered extra time after a previously agreed July deadline for finalising the deal expired.
The negotiations are expected to produce a business plan with a model for Air Malta’s future growth, but the government has insisted it will only accept the deal if it is in the airline’s and country’s interest.
“Talks with Alitalia are ongoing, and in the coming weeks the government will be taking an important decision,” he said.
Dr Zammit Lewis noted the business plan would deal with “endemic problems” that have shackled the airline for years. “All unions are aware that long-standing issues have to be addressed if the airline is to survive,” he said without elaborating. The memorandum of understanding between the government and Alitalia signed in April stipulated that Air Malta would have to be delivered in “the right shape and size”.
It is understood the airline, which has eight aircraft, is overstaffed and has productivity issues. It failed to return to profitability last March after a painful five-year restructuring plan agreed with the EU that saw government invest millions of euros in State aid. Under EU rules, the government cannot pump any more money into the airline and views the strategic partner as a long-term solution towards viability.
Talks with Alitalia risked being derailed by pilots who resorted to industrial action when their financial demands were rejected by Air Malta.
The airline tried to stop Alpa by taking the matter to court, but the matter was thrown out after the judge ruled the union had every right to protect its members’ interests.
Air Malta scheduled a meeting with the pilots at the end of August, by which time the business plan with the strategic partner will have been concluded. Pilots objected and threatened to order a work-to-rule.
On Thursday, the impasse was unblocked after marathon talks.
'Air Malta is not a cash cow': MHRA
In a statement, the Malta Hotels and Restaurants Association urged both parties to be reasonable in their demands and expectations. The national airline was not a cash cow, the MHRA said, but neither was it a national liability.
"It is incumbent on the two sides to this issue to meet and come up with solutions which are fair and equitable given the country's need for a successful national airline and the UCC's requests," the MHRA said.