Big business conveniently safeguarded from Air Malta restructuring

Air Malta pilots are up in arms over the proposed restructuring programme for the national airline presented to them, because they are being made to sign a non-disclosure agreement not to divulge its details.

Air Malta is in the middle of a restructuring programme that has seen the Maltese government subside €50 million in losses, sack key executives include CEO Joe Cappello, and plan radical downsizing of the airline.

In describing his reaction at the non-disclosure agreement, one irate pilot told MaltaToday that Air Malta chairman Sonny Portelli “thinks he is running a hotel, not an airline.”

Even the Labour party’s representatives on the Air Malta steering committee were asked, but refused, to sign the non-disclosure agreement.

While pilots are braced for serious cuts from the restructuring programme mapped by the Ernst & Young consultants brought in at Air Malta, MaltaToday has learnt the programme fails to take into consideration the extravagant €20 million the airline pays to Malta International Airport every year in airport charges.

“MIA penalises Malta, and it treats Air Malta differently and it knows that without Air Malta it would not make profits. The tax it passes on to the government is overshadowed by the major losses in other sectors,” a senior manager said.

Another idiosyncrasy is the fact that Air Malta pays MIA to rent out office for its pilots, instead of hosting them in the airline’s headquarters in Luqa.

“The privatisation at MIA and the political nepotism at Air Malta is part of the reason for our downfall. And yet the government has managed to apportion all the blame on senior management, when many of these officers were not allowed to action reform by the same ministers, namely Austin Gatt,” the source said.

MIA also applies charges on Air Malta which its parent company – Vienna International Airport – does not even apply at the Vienna airport.

Key executives like chief executive Joe Cappello, a long-time employee of the airline since its inception in 1973, and chief financial officer Alfred Lupi were so far unceremoniously asked to leave the airline.

“It’s unfair to blame Cappello and Lupi. Ministers have put a lot of political pressure on the airline,” a pilot told this newspaper. “We were always faced with chairmen who had shared loyalties.”

These include former chairman Lawrence Zammit, who had previously been a former chairman of MIA.

Another beneficiary of Air Malta’s business outsourcing is the Bianchi Group, the Malta consultants to Airbus Industrie who successfully concluded the sale of aircraft and complete fleet renewal to Air Malta, which has a fleet of 11 Airbus.

“The rates for maintenance are astronomical,” another pilot said of the fleet.

The Bianchi Group’s director Michael J. Bianchi is also a director on the board of Malta International Airport.

But apart from the hold MIA has had over the national airline, Air Malta is still in search of a new leader that will action the restructuring programme. In comments to Radju Malta last Saturday, finance minister Tonio Fenech said he had not yet found anybody willing to take on the airline in the form demanded by the restructuring programme.

Other sources claim the government’s gamble is on how the impact the restructuring programme will have on the airline, will affect it electorally with two years left for the elections.