Statement by Air Malta on the COVID-19 crisis

8 April 2020

Date: Wednesday, 8th April 2020
Ref: 032-2020 EN

Statement by Air Malta on the COVID-19 crisis

The COVID-19 global crisis lead Air Malta to ground the majority of its fleet as a result of various restrictions imposed on major airports around the world, including Malta International Airport to help contain the spread across countries.

The COVID-19 outbreak has substantially affected the Company. Not only have its operations dwindled to a mere 2 flights per day (as opposed to the scheduled average of 20 daily flights) but the extraordinary amount of cancellations, and therefore reimbursements, together with the obligation to continue servicing fixed costs, such as aircraft lease payments, have led the Company to necessitate mitigation of costs, including payroll costs.

The COVID-19 crisis brought tourism to a halt, meaning that the airline’s cash returns from the sale of flight tickets vanished. The Airline is currently servicing the country to fly in Maltese citizens stranded abroad, as well as bringing in crucial cargo, essential medical equipment and supplies. However, this is not enough to help the company maintain its current fixed payroll costs.

The Company offered Unions representing different sections of company employees, to agree on a minimum floor of the average pay of the last twelve months, capped at €1200, as basic monthly income which would be applicable for all those on indefinite and definite contracts, meaning that all employees, including staff at head office, engineers, cabin crew, and pilots would get a minimum income of €1200 monthly even if they are not required to operate and stay at home. This would have also meant that no employee is made redundant and that those employed on a definite contract would also have been retained in employment. The offer also specified that if compensation for actual work performed would (in terms of the applicable collective agreement) result in compensation in excess of €1200 in a month, they would be remunerated on the basis of the actual amount due in terms of the applicable collective agreement for the work performed.

Despite the company having offered the same proposal to all Unions representing different sections of its employees, it was only Engineers union who understood the dire situation the company is in and accepted the proposal through a 90% vote by its members.

The Union of Cabin Crew (UCC) were offered the same, however they did not accept the company’s offer. The Airline made it clear that it could not afford such salaries and gave UCC four deadline extensions for it to reconsider its position. Unfortunately, UCC was not favourable to the company’s proposal to keep all employees on a salary of at least €1200.

ALPA, the union representing the pilots at Air Malta, also did not reply to the company’s offer insisting that the airline to make further counter offers.

As a result, the Company regrettably had to announce to its workforce that a number of employees falling under the collective agreement signed with the UCC and ALPA will be made redundant due to the current circumstances and the failure to reach agreement with the same Unions on cost mitigation measures which could have avoided such redundancies.

This was communicated to both ALPA and UCC in an official communication letter sent to the them and the Director General for Industrial and Employment Relations, in accordance with applicable legislation.

Air Malta currently employs 333 employees who fall under the collective agreement signed with the Union of Cabin Crew. Of these, 188 are on an indefinite term contract, while 145 are on a fixed term contract. Employees on a fixed term contract have already been notified that their employment will not be extended following the expiry of its current term. Apart from this, the company requires another 139 cabincrew who are on an indefinite term contract to be made redundant. The company also employs 134 employees who fall under the collective agreement signed with ALPA, all engaged through an indefinite term contract. The company requires 108 Pilots to be made redundant.

The employees retained will be sufficient for Air Malta to continue operating at current levels which are expected to be the case for a number of months.

At the same time, Air Malta’s top management, has already accepted a significant pay cut in their salaries as well as the removal of allowances and perks, despite that they are still working to save the airline in these turbulent times.

In the circumstances were the airline’s hands are tied to almost a zero-revenue situation, the company can’t do otherwise for it to survive through this storm. The Company is disappointed that the Unions were not considerate and sensitive enough to its very hard financial situation, when the aviation industry is facing the worst crisis in its history. The Company notes that other European airlines have already made thousands of their employees redundant in the light that this economic crisis will be with us for a good number of months.

Airmalta, as a national carrier, remains committed to provide a reliable air transport service to the Malta Islands and its citizens, even in the worst of economic times.