“The single biggest risk” to Air Malta comes from the unions, according to an internal report which warns their “power game” could destroy the ailing airline.

“Union behaviour and power game will bring Air Malta down in the very near future,” the government, as the airline’s major shareholder, is told in the report.

The business is threatened by “the very high level of strike willingness for almost every small change, to protect the power of the unions involved”.

The report was prepared by top management and forms the basis of the government’s negotiating position in its bid to settle outstanding collective agreements with various sectors of the airline’s employees.

It warns in no uncertain terms that political support is urgently needed to create a future for Air Malta, as at the moment the focus is “more on the political impact of the changes required rather than business needs”. As the government struggles to save the airline from collapse, the report says failure to take drastic measures to curtail “its “inflexible and high cost structure” will spell the end of Air Malta.

Very high level of strike willingness for almost every small change, to protect the power of the unions involved

The airline is still “a union-driven company rather than customer or management driven, and this is leaving an impact on in-flight product, ancillary revenues and service levels, putting the company more at risk of falling behind low-cost airlines”.

Four unions represent the various sectors of Air Malta employees, all with different priorities.

The Airline Pilots Association (ALPA) represents the pilots, already paid handsomely while enjoying a raft of perks.

According to the confidential report, the government should seek to offer early retirement to reduce the “excessive” number of pilots on the company’s books, while certain perks, such as the provision of transport to all flying staff and allowances for working after 10pm, should be abolished.

The same is being recommended for the separate negotiations to be held with the Union of Cabin Crew. In addition, the company is recommending a wage freeze for both pilots and cabin staff and that changes be implemented on rostering conditions.

The company is also urged to negotiate an early retirement package with the other two unions, the Association of Airline Engineers and the General Workers Union, which represents the ground staff.

For the latter, slashing the night shift allowance is being considered a must.

Air Malta is currently in dire straits after the failure of year-long negotiations initiated by the government to sell a substantial stake to Alitalia.

Last week, after a threat of strike action by the Union of Cabin Crew over their outstanding collective agreement, Tourism Minister Edward Zammit Lewis re-announced a new committee, headed by former President George Abela, to reach an agreement with all unions on their agreements by the end of June.

A similar committee was already established by Mr Zammit Lewis in January 2016, but it never took off.

Sources close to the company told The Sunday Times of Malta that the company is currently surviving on a BOV bank loan and revenue-generated cash flows.

“The government is adamant to keep the current status quo until the next election if possible”, a source said.

Last year, Air Malta failed to hold its annual general meeting and publish its financial results. In the middle of last month, the minister said that the audited accounts were expected to be completed within days and an AGM would be held once investors in the airline had been found.

But local investors would not be enough to save the national airline, Dr Zammit Lewis admitted –  a strategic partner was still needed to open up new possibilities for Air Malta.

ivan.camilleri@timesofmalta.com

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