New airline, if pilot talks fail

As negotiations with ALPA, the pilots’ union, remain at a standstill, sources close to the negotiations have told MaltaToday that time is running out for Air Malta to conclude a deal.

This newspaper is informed that Air Malta has offered its pilots a package that will see first officers’ earnings increase by an average of €72,392 over a five-year period, while the average increase for a captain would be €105,600. 

Furthermore, arrears of €6,000 have been offered to each pilot for the expired period of the collective agreement between January 2016 and December 2017.

The company has also guaranteed the immediate promotion of ten First Officers to Captains in 2018 and 2019, with a further 15 promotions planned over the subsequent three years.

The company has stressed that the offer is its final one but it appears that a significant segment of the pilots are still unwilling to fly longer hours in exchange for the increases offered by the company.

Earlier this week, the government announced that it had set up a new company, which would also be seeking to obtain an Air Operating Licence (AOC).

The government has said that the move was intended to protect Air Malta’s lucrative airport slots, but the sources said it could also serve as a contingency plan in the eventuality that an agreement is not reached with Air Malta’s pilots over their working conditions.

“The minister had said that all collective agreements needed to be signed by the end of 2017 but realistically, the airline will start to face significant difficulties once the new scheduled routes planned for 2018 start,” the sources said. Financing the airline would also be difficult unless all employee sections agreed to a new collective agreement. 

They said that while the government still hoped an agreement could be reached, it was ensuring that it retained some options, with the reasoning being that if an agreement is not reached, it could shift operations to its second airline, which would be in possession of Air Malta’s slots.

“At worst, half the airline’s pilots would agree to the terms being offered and join the new airline,” they said, adding that the airline would then need to rely on wet leases - hiring an aircraft with flight crew - until it recruits enough pilots for its operations.

Back in 2016, an agreement was reached between ALPA and Air Malta in which the pilots agreed to fly longer hours, in accordance with European Aviation Safety Agency (EASA) regulations, with the intention to increase pilots’ flying hours.

The agreement also saw the company commit to guaranteeing pilots’ their best pay from either of 2014, 2015 or 2016, as well as the launch of a voluntary early retirement scheme.

“At the time, the strategy was to reduce the airline’s operations, so they were concerned that they would be paid less since they’d be operating fewer flights,” explained the sources, adding however, that since then, the strategy for Air Malta had changed drastically.

“With the increase in flights that are planned, guaranteeing pilots’ take home pay is no longer an issue since they will be flying more. The problem now is the pilots feel they are being pushed too far.”

Tourism minister Konrad Mizzi has insisted that the airline needed more flexibility from its pilots if it is to remain afloat, with EASA flight time limitations being included in the new collective agreement. ALPA is the only union that has stuck to its guns as Air Malta signed its last collective agreement with its remaining employees last week.