[VIDEO] ‘If government takes Air Malta into liquidation, it will break the economy’

Video interview by Karl Stagno-Navarra

The president of the Airline Pilots Association, Dominic Azzopardi, is claiming that part of the €52 million bailout for Air Malta has been used to pay off debts the airline had with Bank of Valletta, one of the airline’s shareholders.

He claims Air Malta, whose new management intends shedding some 600 jobs under restructuring conditions it has presented to the European Commission, has broken one of the conditions in the Ernst & Young restructuring programme.

“We know that part of the €52 million government gave to Air Malta for restructuring has gone to Bank of Valletta. ALPA has confirmation that the bank threatened Air Malta into closing debts it held with the bank.”

“I am absolutely certain that a substantial part of the €52 million were used to pay off certain loans with BOV. And this was when the Ernst & Young report clearly said that a specific loan to the airline should have been extended, rather than paid off,” Azzopardi said.

Azzopardi says that in meetings with the finance minster, Tonio Fenech had “no reaction” to his allegations. “I feel a certain responsibility upon me. If we don’t wake up, we’ll melt...”

Azzopardi yesterday was joined by the General Workers Union and the Forum confederation, which includes the unions of cabin crew and airline engineers, in calling for a national demonstration on the national airline. The president of the pilots’ union said ALPA will decide on Wednesday whether it intends grounding airplanes if government does not commit itself to change the contracts the airline has with Malta International Airport.

Azzopardi is also under pressure from industrial leaders and hotel and tourism lobbies not to ground aircraft at peak season. Speculation is now growing that government may use the seminal strike action as an excuse to liquidate Air Malta, pay off the debts and then sell off the company.

“We’re not stupid. The people are behind us. The Malta Hotels and Restaurants Association was the first to demand the introduction of low-cost airlines in Malta. They should declare their interests.

“If government wants to liquidate the company we’re not going to hold it from doing so. If government wants to talk to us and mend the situation, then it means it wants to talk. If government liquidates Air Malta, we won’t budge from Castille... government won’t have enough pilots to man a new service,” Azzopardi said.

One of the threats to a new airline service – perhaps privatised – is that only Maltese-registered pilots can fly Air Malta aircraft, and pilots must have a Maltese licence. Azzopardi said that Maltese pilots flying airliners with foreign companies have lost their native licence. “And you can’t have a foreign company providing the service because it would be a strike breaker. The European Cockpit Association is informed with what is happening in Malta and it is expected to make a flight ban if we go ahead with a strike.”

Warnings by the finance ministry that strike action could endanger Air Malta as a whole have been widely interpreted as a prelude to the closure of the airline.

“It doesn’t pass through my head that government could liquidate the company. But that it gives it for free to somebody... yes. If it liquidates the company it will bring the country to its knees. I think finance minister Tonio Fenech is responsible enough. We’re a chain – if we go down, others go down at Air Malta. We want to save Air Malta.”

Amongst Azzopardi’s demands is that Malta International Airport – privatised since 2002 to the Austrian operators of Vienna International Airport and Malta’s Bianchi Group – zeroes its landing charges for the national airline.

“BMI is right now the second largest airline at Heathrow Airport and it is demanding an investigation into the high tariffs at the London airport. Nobody asks the same in Malta, where since 2004 Air Malta has paid over €150 million to MIA.

“If privatisation has turned out to be a mistake, Air Malta cannot suffer such consequences. MIA’s tariffs are eating out Air Malta. Even if all Air Malta employees are laid off, it could not operate with MIA’s high tariffs.”

Azzopardi produces a hit-list of charges: Air Malta pays MIA every year for the provision of 800 parking slots, billing it some €40,000 a year; Air Malta pays MIA €375,000 every year so that it can use a briefing room for cabin crew and pilots; Air Malta pays €5.80 for every airplane that lands at MIA for Air Malta employees who work in the terminal proper – which amounts to hundreds of thousands of euros a year.

Azzopardi adds that 55% of all air traffic at MIA is through Air Malta flights, which is where strike action by ALPA could really hurt the airport. “The MIA will lose a commission on airplanes that will not land in Malta and those that will not carry cargo in case of a strike,” Azzopardi says.

But ALPA is also demanding that Air Malta is allowed to create a new cargo company where consumers can deposit their parcels at the airline company and pay for their transport. Azzopardi says the service will be cheaper for consumers and Air Malta will be eliminating intermediaries who are profiting from higher charges.

“In the transport of cargo there are people who are paid one way, while others are given a cheaper prices. For example, for every 2kg to the UK there are people who are paying one way, and others at a vastly cheaper rate. The system itself is unjust. If a client pays €103.50 so that Air Malta transports 2kg of cargo to the UK, Air Malta is only paid €2 – just one euro per kilogramme. Does this make any sense?”