Air Malta has not yet concluded union negotiations on payout deals to cut staff numbers but the company is “hopeful” an announcement can be made in “the coming weeks”.

The statement, made in a memo to all employees this week, is no different from a similar declaration made at the beginning of the month by the airline’s chief executive officer Peter Davies in another memo.

At the beginning of August, Mr Davies had reported “good progress” on talks with unions over early retirement and voluntary redundancy schemes and said an announcement “could be made in the next few weeks”.

When contacted yesterday, General Workers’ Union general secretary Tony Zarb said the union was waiting for the government and the company to come back with a fresh financial proposal in the coming days.

“The proposals made so far fell below our expectations and discussions are ongoing,” he said.

The company is holding separate meetings with the four unions represented at Air Malta but Airline Pilots’ Association president Domenic Azzopardi yesterday said his union was unaware of the voluntary redundancy schemes proposed by the company. “They should have been issued by now but we heard nothing,” he said.

In the latest company memo, Air Malta said all staff would be offered the chance to apply for a voluntary redundancy scheme or an early retirement scheme. “We will do our best to accommodate these requests but the company does retain the right to decline an application,” the memo said.

It added that the restructuring exercise would not only mean fewer jobs but also that some jobs would not exist anymore in the new structure.

“There are also some new jobs that didn’t exist before – our approach will generally be to open these to applications,” the airline said, adding the changes would become clear when the different department structures were finalised.

Redundancy schemes

Air Malta had to issue the schemes in August, giving employees a whole month to ponder their future but, with no sign of the schemes yet, the company sought to allay fears that the process will be rushed.

“Naturally, the closing date for applications will be extended so that you have sufficient time to consider your future. If your application is approved, your departure date will be subject to operational requirements. It may not be immediate.”

The company said support would also be available from the Employment and Training Corporation to help workers find alternative employment.

Airline to lose £30 million

An internal memo circulated to all Air Malta staff this week said the company was expected to lose about €30 million from its operations this year even though costs had been contained.

“Clearly, this is not acceptable or sustainable... we have stopped losses from growing and now we need to focus our attention on reducing them,” the company said.

It said it had to cut costs by €30 million and increased revenue by another €30 million to turn around its fortunes. “This is a big challenge but if successful this should see us back to breakeven by financial year 2014,” the memo said.

It described the European Commission’s analysis and approval of state aid to the airline as “a slow process” adding that a decision was expected by the end of the year or the beginning of 2012.

The government last year pumped €52 million into the airline to prevent it from going bankrupt but this cash injection was only allowed by Brussels on condition that a restructuring plan is implemented.

The memo said that towards the end of last month the Commission had responded to the initial restructuring plan submitted by the government in mid-May.

“The Commission raised numerous questions that required detailed responses and, after much work within a short time frame, a detailed response was submitted on July 29,” the company said, adding that the airline did not have to wait for the Commission to start implementing the reforms.

ksansone@timesofmalta.com