Air Malta has put off its decision to make 80% of its cockpit crew redundant today as pilots have flagged a last minute ‘job guarantee’ declaration in their favour, signed in 2018 by then Tourism Minister Konrad Mizzi on behalf of the government.
The guarantee came in a side letter that forms part of the pilots’ collective agreement until 2023. It veers from any common practice in aviation industrial relations, giving all Air Malta pilots a take home pay guarantee that is identical to their current pay packages.
The agreement was drafted and negotiated by none other than Prime Minister Robert Abela, who was Minister Mizzi’s legal consultant at the time.
Industry sources told The Shift that the job guarantee was given to pilots to make them accept a new five year collective agreement starting in 2018: “Evidently this job guarantee is now coming back to haunt the government as it has legal validity.”
The side letter clearly states, “the government is giving all pilots a guarantee of a job in Malta and a take home pay, according to the conditions of the collective agreement signed also today.”
Back in 2018, when a triumphant Mizzi announced “a historic milestone” in Air Malta’s history, with the wrapping up of the new collective agreement that put pilots’s minds “at rest”, he did not mention the side letter guaranteeing pilots a government job.
Pilots, through their union ALPA, are now insisting on its implementation. The agreement jars with the decision by Air Malta earlier this month to send collective termination notices to 108 of its 134 pilots, with no severance package.
Both Air Malta and Economy Minister Silvio Schembri accused pilots of ‘hijacking’ the airline by not accepting a social wage of €1,200 a month during the COVID-19 crisis.
On its part, ALPA, which yesterday filed a judicial protest, is insisting that it was not true that pilots were refusing to agree on a pay cut. Rather, they are not agreeing on the terms offered by the company.
Air Malta has been struggling financially for the last two decades despite a five year plan agreed with the EU in 2011, during which over €120 million of State funds were injected into the airline. Yet the company has still not published its audited accounts for the 2019 financial year.
After registering a questionable small profit in 2018, media reports suggest that the company was already some €30 million in the red by March 2019, long before the coronavirus hit the industry.
Industry sources suggest that the sudden heavy handedness by the government and the national airline was to try to take advantage of the pandemic in order to force significant changes to the various collective agreements and try to shore up its already pre-coronavirus losses.
The aviation sector across the globe has been one of the industries hardest hit by the pandemic as airlines grounded most of their aircraft and people stopped travelling.
Almost all airlines are introducing hard hitting cost cutting measures aimed at avoiding financial collapse.
While some aviation giants, including British Airways and Lufthansa, have put most of their workforce on forced leave, others including Etihad have slashed staff pay packages by between 25% and 50%.
While airlines are projecting to restart their operations in later in the year, experts are warning that it will probably take at least until 2022 for global airlines to be back to their pre-COVID turnover.
Experts say the crisis will probably force some small airlines to fold while others attempt to join larger aviation alliances to survive.