Government may ‘buy out’ expensive clause that sees Air Malta pilots receiving salary after leaving

Air Malta is forking out thousands in payments to pilots who retire in line with a collective agreement clause that government may ‘buy out’.

The collective agreement clause states that individuals aged 55 or more, who have been pilots with the national airline for more than 25 years, would be paid two-thirds of their salary each month until they retire.

Industry sources have told MaltaToday the clause allowing pilots to be paid two-thirds of their salary, while not actually working, is costing the airline “a lot of money”.

“The airline cannot continue to fork out this amount of money, it’s just not feasible, and something has to be done,” they said.

There have been talks between the airline and the pilots’ union in a bid to have this clause removed with sources saying that the government is even considering “buying it out”.

Both sides held discussions last week, but no final decision has been taken. Negotiations are ongoing.

Air Malta is passing through a painful restructuring process as government seeks the European Commission’s green light to shore up the airline.

In January, Finance Minister Clyde Caruana had announced a voluntary employee transfer scheme in a bid to cut Air Malta’s workforce by half and save €15 million per year in wages.

However, this process has stalled and government pushed back the deadline for Air Malta’s employee transfer scheme to the end of the year, while also introducing a generous voluntary redundancy and early retirement scheme.

Pilots were excluded from this latest exercise since Air Malta had sacked 69 pilots in the summer of 2020 after talks with the Airline Pilots Association broke down. The move came after a protracted stand-off between the airline’s management and pilots after the latter refused to accept a social wage of €1,200 per month in the wake of the COVID-19 crisis.

Caruana has said that the restructuring process will involve renegotiating all collective agreements to give the airline more flexibility.

Following a meeting on Budget 2023 with the social partners last week, Caruana told reporters that his plans to make Air Malta sustainable will cost government “many more millions.”

Pressed on how much the process will cost the taxpayer, he said he cannot give an exact figure, because it’s an ongoing restructuring process. He blamed collective agreements which  “do not make any commercial sense,” reiterating that “in order to get Air Malta back on its feet I need to spend many more millions.”

Existing collective agreements were concluded in 2018 and expire next year.

MaltaToday reached out to ALPA but the calls were not returned.