Tourism Minister Edward Zammit Lewis has described the closure of Cyprus Airways as “worrying” but does not think Air Malta will follow suit, despite admitting that the national airline’s financial situation is a “difficult” one.
Cyprus closed down its flag carrier Cyprus Airways last week after the EU ordered the struggling airline to pay back over €65 million in illegal state aid. The European Commission said the Cypriot government had breached the rules on support for struggling companies.
“One instinctively worries since such a thing happened to our neighbour but I don’t believe that the situation [of Air Malta and Cyprus Airlines] is the same,” Dr Zammit Lewis told Times of Malta.
“The ruling given by the Commission says that Malta is a country which has always kept to the guidelines of the restructuring process.
“But I won’t hesitate to admit that Air Malta’s situation is a difficult one. It’s a challenging situation which we are working on by strengthening Air Malta’s management as much as possible so that it will, in turn, drive the reform forward.”
Malta’s national airline halved its losses to €16 million for the financial year ending March 2014 and is forecasting further losses to the tune of €16 million for March 2015. Under its restructuring plan, it needs to break even by next year.
The airline has recently axed its free hot meals and choice of beverage, replacing them with a modest baguette and a bottle of water in a move which is expected to save the airline in excess of €4 million.
Meanwhile, the Malta Hotels and Restaurants Association (MHRA) has described the grounding of Cyprus Airways as a “wake-up call” for Air Malta.
But I won’t hesitate to admit that Air Malta’s situation is a difficult one
“The MHRA has already stated that it finds it completely unacceptable that the cabin crew are taking industrial action to stop restructuring changes from being implemented.
“The Maltese citizens have spent over €150 million of their money through the government of Malta to save the company and their jobs. By their actions the cabin crew are risking the loss of this huge public investment if Air Malta closes down.”
Cabin crew, the MHRA said, were giving passengers a limited service in protest at no longer being provided with a “suitable meal” as stated in their collective agreement but the same bread roll and bottle of water being provided to economy passengers.
Air Malta’s stakeholders did not only comprise the cabin crew and other staff but also the thousands of people who work in the tourism, manufacturing and financial services sectors, the association said.
It was time for Air Malta’s management to make it clear to employees that they had a choice: to either accept the necessary restructuring which would enable Air Malta to survive, or to find another job outside the company.
It was not acceptable, the MHRA continued, that the many thousands outside Air Malta had their livelihood threatened by a few Air Malta employees who had been working under conditions most Maltese could only dream of.
“For example, which loss-making company will provide a chauffeur driven service from the place of residence to and from the place of work? Which company in Malta offers practically free travel to all its employees and their spouses? The list goes on: free health benefits, practically free travel even after leaving the company and so on.
“Those employees who do not want to participate in saving the company by cooperating with the restructuring should leave now and allow others to move on and cooperate to save the company.
“It is not acceptable that a small minority of employees holds the nation to ransom.”