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Grounded by reality

There is room for further negotiations on both sides

26 July 2016, 8:30am
On Friday, the airline pilots’ union ALPA filed court proceedings against a prohibitory injunction against their right to strike. On paper, the case revolves around industrial relations; in reality, however, there is the survival of the national airline Air Malta, and all it represents, at stake.

Whether the pilots win their legal battle or not, the outcome of the case will matter little if there is no longer a national airline to be employed with. And if the information supplied by Air Malta’s lawyers is correct, that may well be the scenario as soon as next October.

Pilots have done a lot for Air Malta, and that is a fact that no one can deny. In an ideal world, it would be adequate for this service to be reflected in the best salaries permissible in the sector, and conditions to match. Sadly, however, we must come to terms with factors of competitiveness and efficiency that are afflicting the national carrier.

Air Malta, as one of its lawyers has revealed, is €66 million in the red: a very serious situation that has not been made public by the government. 

Indeed it is anomalous that this was revealed in court by the airline’s legal representatives, and not in parliament by the government – the only shareholder, to date – as it should have been. This lack of transparency on the airline’s financial situation is all the more worrying given the government’s commitment to achieve a turnaround for the national airline. 

Now that the information is in the public domain, the pilots’ demands can be assessed against the proper financial context. The reality is simple: ALPA is currently negotiating a contentious collective agreement reportedly tagged at €7 million, over and above a staggering salary bill of €11 million for the airline, while Air Malta is in the midst of negotiations to sell off a minority stake of 49% to Alitalia.

When this was revealed by MaltaToday, the pilots did not deny that they wanted a 30% increase on basic salaries over the next four years. They are contesting demands to fly for longer hours in the month: a move that would inevitably lead to redundancies amongst the 118-staff complement, and cost savings for the airline.

On its part, Air Malta management has long complained that pilots fly just 55 hours, which is far fewer than European counterparts. Flying longer hours in the month would reduce the airline’s salary bill, as it tries to make ends meet on the back of a €230 million restructuring plan that saw it trim the workforce, aircraft size, and routes to balance its books.

All this takes place against the backdrop of the proposed sale of a minority stake in the airline to Alitalia. Government sources claim the agreement with Alitalia hinges on guarantees that will improve productivity from Air Malta’s pilots. Failure to reach an agreement with the pilots will lead to a breakdown in talks with Alitalia: which indicates that ALPA may view the deal as leverage to exert further pressure on Air Malta at a critical juncture.

At this point, we must face hard facts. Given what we now know about the financial situation at Air Malta, the sale of a minority stake seems to be the only way out for the airline. And given what we know about the world aviation industry, and about Air Malta’s dedication to providing a national service at times of need… now, more than ever, it is worthwhile to preserve Air Malta: for the sake of the national interest, as much as for the sake of the pilots themselves, and the other employees as well.

Pilots negotiating a new four-year collective agreement have to come to terms with the reality of the situation: they fly far fewer hours than European counterparts, and to increase productivity they would have to fly more. If this is (as an ALPA lawyer told this newspaper) one of their main negotiating points, it is clearly unreasonable.

Nor is it simply enough to say that pilots, who are paid deservedly handsome salaries, would survive a redundancy and be able to find work elsewhere. Almost all of Air Malta’s pilots are based in Malta, and want to safeguard their quality of life. But they also must recognise that their salary bill is a major component of the total human resource cost at Air Malta. Negotiations work both ways, however, and Air Malta too must be willing to make concessions. The airline should, at the very least, guarantee Air Malta pilots that should redundancies ever take place at the airline, the dismissed pilots would be granted the first right of return should the airline have to re-engage pilots.

And while the pilots’ expectations in terms of remuneration might be excessive, their current package could be revised. Pilots who spoke to this newspaper say they have seen a €1,000 drop in their monthly earnings over the past years since the number of Air Malta flights has decreased, when the airline reduced its fleet from 12 aircraft to eight. They also point towards major discrepancies between their salaries, and those of senior management.

There is, in brief, room for further negotiations on both sides. But negotiations would be pointless, unless the discussion is underpinned by the reality on the ground.

DealToday
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