President takes lead in Air Malta talks

Corrected on Tuesday, 9 November with reference to termination of President's former Air Malta consultancy.

The talks were held at San Anton Palace and were president by President Abela.

Finance Minister Tonio Fenech has met Opposition leader Joseph Muscat and PL officials.

While it remains unknown what was discussed during the meeting, President George Abela still appears as a paid consultant at Air Malta for 2009-2010, with a €5,825 retainer. Later, a Finance ministry spokesman explained that the President had terminated his retainer with Air Malta in April 2009, immediately upon assuming the Presidency.

The information was tabled in the House of Representatives last week by Finance Minister Tonio Fenech, and the spokesman explained that, the PQ replied by the Minister, referred to all consultancies provided to all departments and entities within the ministry's portfolio between the years 2009 and 2010.

"This list did not include a start and end date for services rendered, and therefore cannot be interpreted that any of these services are still ongoing," he said.

Meanwhile, a second meeting was held later in the day at the Finance Ministry in Valletta – reportedly between Fenech, airline chairman Sonny Portelli, and a General Workers’ Union delegation led by GWU general secretary Tony Zarb. A delegation from Ernst and Young, which reportedly prepared a restructuring plan, is also attending the meetings.

The meetings are said to represent the first step to determine the way forward for the belaguered state-carrier.

Government has said that it is seeking EU approval to inject almost Euro1000 million into the airline.

Air Malta could not survive unless it shed staff, according to informed sources – something that both the PL and the unions have declared themselves adequately against any lay-offs.

Throughout the run-up to the talks, the GWU’s position was to insist that workers should not be blamed for the current state the airline, and pointed to gross mismanagement. The union has also insisted that the workers have been burdened with enough sacrifices through previous restructuring efforts that did not resolve the situation.

Government has also been conducting talks with the European Commission on the subject. After Brussels reported reduced to accept the initially-proposed €100 million capital injection, government seems to be trying a different route - potentially first granting Air Malta rescue aid and later restructuring aid.

However, Brussels would not permit state aid to subsidise unproductive jobs, EU sources have been reported as saying. The EU’s rules also stipulate that Air Malta can only benefit from state aid once. Should the restructuring programme fail, no further aid from public funds would be forthcoming, with the upshot being that the company could face closure.

Within two months of state aid approval by the EU, government is bound to submit its restructuring plan. Should the commission not be satisfied with the government’s plan, it could pull the plug on the aid.