Updated 10.06 pm -

Air Malta and the pilots' union have reached a mutually satisfactory agreement enabling the company to move ahead and become the Airline of the Mediterranean, Prime Minister Joseph Muscat announced on Monday night.

He said the pilots now need to formally endorse the agreement in a vote called by their union, Alpa.

The deal was reached in a last ditch round of talks, even as two of six crewed aircraft leased by Air Malta to beat a potential pilots' strike flew in. 

The deal with the pilots was the last one which was outstanding, the airline having already reached agreements on pay and reform of work practices with the unions representing all the other categories of workers. 

Prime Minister Muscat warned on Sunday that the government would not be held to ransom by the pilots.

He said the government was offering a raise of €72,000 over five years for first officers and €105,000 for captains, but it expected them to fly for more hours as part of the airline's growth plans.

The pilots, he said, currently only flew for half of the industry standard.

He said Alpa had proposed that the pilots could stay on their current pay and number of flying hours, something which was unacceptable to the government.

No details of the agreement were given on Monday night, but sources said the government's pay offer remained the same and the talks focused on flying hours.