Muscat warns strike would ‘bankrupt’ Air Malta but pilots’ boss sees no need for strikes

Air Malta has a negative equity of €66 million, a tourism ministry spokesperson confirms

Dominic Azzopardi: 'strike not intended'
Dominic Azzopardi: 'strike not intended'

Prime Minister Joseph Muscat has publicly defended the right of the pilots’ association to launch industrial action but the pilots’ union boss Dominic Azzopardi said this was “misleading” because the airline was attempting to block all forms of industrial action. 

Interviewed on Radju Malta’s Ghandi Xi Nghid, Muscat told host Andrew Azzopardi that the government requested a prohibitory injunction in court to stop ALPA from taking “disproportionate” industrial action as the pilots association is at loggerheads over the terms of a new collective agreement. 

The pilots’ collective agreement expired in December 2015.

According to Muscat, pilots could still protest if they wanted to, just actions should not be “disproportionate” – such as striking for a day or two. But in comments to MaltaToday, Dominic Azzopardi said the prohibitory injunction “prohibited any type of action”.

“I will not criticise ALPA for defending the interests of its pilots … but I’m here to protect the interests of the airline and citizens. Disproportionate industrial action – such as a strike – will not lead them to a pay rise but to a bankrupt Air Malta. The airline cannot afford having striking pilots for a day or two. It will only lead to Air Malta going bankrupt, costing them their jobs, the jobs of the other employees and those in the tourist industry,” Muscat said.

But Dominic Azzopardi told MaltaToday that Muscat “exaggerated” the bankruptcy comment.

“I think it was an exaggeration, probably based on the information he was given,” Azzopardi said, alluding to the Air Malta management. 

The ALPA president said that managers’ pay at the national airline had remained the same whilst the pilots’ take-home pay had been cut by €1,000 per month.

Air Malta has 122 pilots, who each take home an average of €93,000 per year. The national airline has claimed that a cancellation of flights for a day would cost it half a million euros. 

Azzopardi was however quick to dispel suggestions of a strike by the pilots, saying that ALPA was “responsible” in its actions and its goal was to guarantee work for the pilots.

“We have always limited our action to delaying flights by two hours and we were always responsible in our actions,” he said, whilst noting that Muscat had been “very cautious” in his “positive comments” on the situation with the pilots. 

Air Malta is in the midst of negotiations to sell off a minority stake of 49% to Alitalia, although this might fall through if the two sides fail to reach an agreement in the coming months. 

Insisting that the government will not be “begging” Alitalia to buy a minority stake in Air Malta, Muscat insisted that Air Malta will be defending its own turf and, should it fail to reach a satisfactory agreement, will pull out of the negotiations. 

Muscat expressed hope that a way forward is found with ALPA. “The pilots are aware of the situation and know what the airline can and cannot do at this stage. I just hope that, like we moved forward with other unions, we can find a way with the pilots.”

His comments however jarred with statements by other unions, such as that of the cabin crew. 

Cabin crew union president Noel Mercieca told MaltaToday that only one meeting with the Minister for Tourism has taken place so far, some two weeks ago. 

“We asked for the airline’s business plan but they cannot give it to us at this stage. Without the business plan, we have nothing to discuss … our work depends on the number of planes and flights Air Malta operates,” Mercieca said.

Air Malta’s debts reach €66 million

Following the statement by the national airline’s lawyer in court on Friday about the company’s delicate financial situation, a tourism ministry spokesperson confirmed that Air Malta’s current debts amount to €66 million.

“This negative equity is the consequence of the accumulated losses made by the airline in the past years,” the spokesperson said. 

This comes after the tourism minister Edward Zammit Lewistold Parliament last December that the airline’s debt in 2012 stood at €75 million and the airline was aiming to bring this down to €4 million in 2016.

However in the financial year ending in 2016 it was the airline’s losses which were cut down to €4 million. 

In comments to MaltaToday, his spokesperson  said “Air Malta has successfully managed to reduce its losses over the past years. At the end of the last financial year, Air Malta lost €4.2 million, after losing €16.9 million the previous year,” adding that in 2012 - the first year of the EU commission’s restructuring plan - the airline suffered losses of €38.5 million.

The tourism ministry however added that the reduction in losses is not enough and warned that a deal with a strategic partner will only be done if government’s objectives for the airline are reached 

“To survive, the airline needs to aim to grow and return to profitability and we believe that the best way to achieve this is to enter into a strategic partnership with a bigger airline which would help us increase revenues and reduce costs through economies of scale we do not enjoy at the moment as a small standalone airline.” 

In the ongoing court case between the pilots’ union and Air Malta, the airline’s lawyer Aaron Galea Cavalazzi said that the national airline was €66 million in the red, prompting Mr Justice Silvio Meli to warn that if no agreement is reached over the pilots’ wage demands the airline would go bankrupt.

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