A 20% pay increase, staggered over five years, has been offered to all Air Malta workers in exchange for higher productivity, Tourism Minister Konrad Mizzi said today.
He told journalists that the government had opted to go for a growth strategy which involved increasing Air Malta’s routes and the number of planes it operated.
The minister said the pay raise would increase Air Malta’s payroll costs by €16 million.
In order to fund it, the airline would have to increase its revenue by €100 million.
Dr. Mizzi said new collective agreements for the next five years would have to be signed by January 1.
The minister said the airline had two options, it could either continue shrinking or expand in order to increase revenue and spread its cost base over more planes.
In exchange for the basic pay increases, he said, pilots and cabin crew members would be expected to work more hours, as per international standards.
Air Malta Chairman Charles Mangion said this offer was the maximum that the airline could afford.
President Emeritus George Abela denied that there was any deadlock between the government and unions.
Asked if the government was still seeking private investment in the airline, Dr Mizzi said the immediate priority was making sure the airline remained solvent.
Internal studies would be made in order to see how the airline could continue to expand, he replied.
The airline yesterday announced it would be hiving off its ground handling services into a separate company.
An agreement has been reached with the GWU to move around 450 Air Malta ground and passenger handlers to a new company. However they too will benefit from the salary increase offer. The minister denied that there were legal issues for the workers to be hived off, as claimed by PN leader Adrian Delia yesterday.
It has been a turbulent few days for the airline.
On Saturday, Dr Mizzi threatened to close down Air Malta and open a new airline if unions and employees failed to work with the government in a bid to turn around Air Malta’s fortunes.
Dr Mizzi’s threat drew condemnation from both the PN and UHM.
Last year, attempts by the government to enter into a strategic partnership with Italian airline Alitalia fell through after months of difficult negotiations.