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Lm1.2 million wage savings at Air Malta
Julian Manduca
The recent announcement of low-fare airline Ryanair’s intention to start operating from Malta has fuelled doubts about Air Malta’s ability to compete in a completely liberalised airline market – one of the reasons is the reduced wage bill and low-cost outfit of the no-frills airlines.
Air Malta currently employs 1,733 ‘active’ full-time workers earning an average of Lm12,600 each annually for a payroll of Lm22 million, MaltaToday was told this week. Investment Minister Austin Gatt’s ministry avoided stating which year has Air Malta’s payroll bill been the highest, but in 2003 the airline employed 1,925 full time employees and its payroll costs were Lm23.5 million.
From research carried out by this newspaper Air Malta’s payroll figure peaked that year climbing up from a modest Lm 6.7 million in 1976 to Lm15 million in 1998.
The current projected payroll for the year to August 2004 is Lm21.9 million, and is the lowest it has been for the last five years, a figure that is nine per cent lower than 2001.
Air Malta is set to benefit from savings in its wage bill amounting to Lm1.2 million over less than a year MaltaToday has been told. The figure represents the savings made from May 2004 to March 2005.
The biggest saving comes from a reduction in the number of ground handling staff which have been reduced by 29 and 15 each from the human resources and finance departments. Ten employees no longer work in the section for cabin crew, passenger handling and cargo which represents the largest saving of Lm340,740.
Top management at Air Malta has been drastically reduced coming down from 60 officials to 28. While 13 general managers have been appointed recently, the previous management structure had one executive chairman, one chief operating officer, 23 group heads and 35 heads.
That has changed to one chief executive officer, one chief operating officer, eight chief officers and 22 general managers, but a ministry official said Air Malta will be recruiting a number of “other general managers from outside the organisation, but nowhere near tipping the balance neutralised by retirements from the organisation.”
Air Malta has knocked off old allowances that the management used to benefit from: “there are no longer any directors’ fees paid to senior management in any Air Malta subsidiaries or committees; executives cars’ lease costs have been reduced from an average of Lm15 per day per car to Lm4.95; telephone and mobile costs have been capped as have fuel expenses; the payment of social and professional membership fees has been abolished; as has been the wedding gift allowances; daily duty travel is now capped at Lm30 daily and accountability of all daily overheads by each department has been introduced.”
The spokesperson has also admitted the national airline was indeed over-staffed, “but it would be superficial to simply speaking in terms of reducing numbers. A right-sizing exercise, which is still ongoing, demands focusing on each sector of the company one at a time and identifying what resources are really needed to deliver a good job efficiently.
“A good place to start was the very top. We right-sized management, cutting expenditure and putting together under the leadership of the CEO what he thinks and we think is the best way to run the company. Now management will have to job to deliver that attitude down the ranks.”
julian@newsworksltd.com
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