UPDATED 6.30 p.m.

The Finance Ministry said today that important and difficult decisions had to be taken about Air Malta and it was sensitive to the realities of the employees and their families. However the number of employees had to reflect the airline’s needs in the context of unprecedented competition.

The ministry was reacting to complaints by the Labour Party that the committee monitoring the restructuring of the airline had not been told of any plans – reported in the media - which could see the airline cut its workforce by half.

The ministry said it wished to remind the PL that it had been agreed within the committee that any decisions involving the workers would first be discussed with the trade unions before coming before the committee.

For political convenience, the Opposition was ignoring this agreement, the ministry said.

It said that experts had presented various aspects of the proposed restructuring plan in the context of the challenges the airline faced to be viable.

The ministry pointed out that the European Commission had approved a Malta government loan of €52 million to the airline subject to approval, within six months, of a restructuring plan. Through this plan, the airline needed to show that it could have a viable future. Should the plan be rejected (by the EU) no further assistance would be possible and Malta would end up without a flag carrier.

The ministry said important and difficult decisions needed to be taken to make sure that the airline was viable.

This was a government which had always been, and remained, sensitive to the needs of the workers and their families. The size of the workforce needed to reflect Air Malta’s operational needs at a time when the airline was facing unprecedented competition and high oil prices.

The government remained committed to reaching an agreement with the stakeholders for a plan to give the airline a sustainable future. As in previous processes, it would also offer a number of solutions so that any decisions would have the least social impact.

The ministry said that while it worked to guarantee a future for Air Malta, the Opposition was riding on media speculation in order to try to gain political mileage, without consideration of the repercussions which its actions could have on the process itself.

In its statement, the Labour Party referred to reports in various media that the company may dismiss between 600 and 700 workers.

The party noted that the government had not denied the reports. It complained that crucial questions were not being answered in the steering committee. In Parliament, questions were also not being answered, with commercial considerations being cited.

This government attitude was 'disappointing' the party said.

The Times reported this morning that half of Air Malta’s 1,200-strong workforce could be shed as part of the rescue plan being explored.

Civil aviation industry sources said the airline would need to shed about 600 employees to be able to operate profitably.

In the meantime, ahead of a final decision, a circular was issued to heads of government departments asking them to identify positions that could be filled by workers redeployed from Air Malta. The government is planning to employ as many redundant Air Malta employees as possible but this does not mean all of them will be redeployed with the public sector.

The sources said the steering committee working on the restructuring plan did not actually discuss redundancies but the report, being compiled, will go into each department and see how many workers the company could do without.

The plan is at “an advanced stage” and the government has now embarked on one-to-one meetings with union representatives to discuss the airline’s future in more detail.

Meetings were held with the General Workers’ Union and the unions representing cabin crew, pilots and the airline’s engineers.

The national carrier experienced severe losses over the past two years and the prospects for this financial year, which ends in March, are looking bleak . Late last year, the European Commission gave the government the go ahead to pump €52 million in emergency aid into the airline. Approval was given on condition the airline underwent serious restructuring.

The plan to overhaul Air Malta has to be submitted by May and a draft restructuring proposal had to be presented by the end of January. The draft has not seen the light of day and, when asked about this, the Finance Ministry said the January date was “ an internal working target date”.

“The deadlines, agreed with the Commission will be met,” a ministry spokesman said.

Meanwhile the GWU and the UHM both said they will be holding meetings for the workers.

The GWU said no employee should remain without a job and the government should assume its responsibilities. It said it would not accept anything which was not in the best interests of the employees.