Air Malta is planning cost-cutting measures worth €6 million, which may include job cuts and a wage freeze, following the government’s failed attempt to sell a stake in the airline to Alitalia.

The government however this morning denied that the airline would try to “go it alone” without strategic partners, saying it was talking with a number of interested parties but it would proceed with caution, while also considering the option of Maltese investment. It made no reference to the cost-cutting plan but said it would 'continue' to talk to the workers and their representatives. 

The new plan envisages a €6 million saving through the axing of a significant number of jobs, particularly among flight crew. This means Air Malta would need to either sack or make voluntary redundancies among pilots, first officers and cabin crew.

The airline has dropped a number of unprofitable routes in a bid to balance the books.

Further cost-cutting would take place in the ground handling operations either through privatisation or re-negotiated collective agreements. The plan also proposes the possibility of a wage freeze so that Air Malta employees would not receive their annual salary increments.

It is made clear that implementation would likely be opposed by the unions and that the company needs to plan well to ‘defeat’ any industrial action.

This week, Air Malta put up adverts inviting applications from prospective cabin crew staff. It is not known whether this move is related to the plan. 

A number of Maltese businessmen, some close to the Malta Hotels and Restaurants Association, have long shown a keen interest in buying up part of the airline.

Interest in Air Malta has also been shown by Turkey’s low cost carrier Pegasus and by Air X, a locally-based airline charter and management company.

Sources said the government seems to be more open to the idea of offering shares to the public, a proposal made by the Nationalist Party.

The government’s pussy-footing over Alitalia, even when it had long been evident that negotiations were going nowhere, has had political ramifications.

MHRA sources told this newspaper that it was now Deputy Prime Minister Louis Grech – himself a former Air Malta chairman – who will be calling the shots instead of Tourism Minister Edward Zammit Lewis.

“Though Mr Zammit Lewis will still be informed about developments, the Prime Minister wants Mr Grech in charge,” a source said.

Recently, Mr Grech employed the services of Joe Capello as his consultant. Mr Cappello served as Air Malta CEO when Mr Grech was the airline’s chairman.

This is a sign that the airline is unofficially under the charge of Mr Grech.

ivan.camilleri@timesofmalta.com

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