Grounded
This is my column in The Malta Independent on Sunday, today.
Just imagine the tension at Air Malta as employees are told that more than 500 of them will have to go. Some of them are just setting up home; others have children to raise and loans to pay.
Many are in late middle age and know that their severance pay will mark the end of their working life because they are unlikely to find another job.
All of them are now going about their business with a knot in their stomach, wondering where they might be by the year’s end.
The knowledge will be of scant consolation to them that if 500 don’t lose their job, then the airline will collapse and all of them will, with many more besides as the knock-on effect runs through the economy, taking down other jobs and businesses.
If you stand to lose your job, the fear obscures all other thoughts, and renders impossible meditation on the fact that the inevitable has now happened, that it should have happened years ago but nobody was able or willing to bite that particular bullet.
Now that Air Malta is technically bankrupt, or would have been without that coup the government pulled off in securing exceptional EU approval for state aid in the form of a loan, hands have been forced and the rescue team has been brought in. And hundreds of people will be made redundant.
You can argue that many of them have long been redundant, that several were redundant from the word Go, and you will have highlighted part of the problem that has crippled the national airline from the start.
But still you have to sympathise with those people who were allowed to think that, like those on the public sector payroll, they had a job for life and total security.
To a certain extent, they are victims of a corrupting mindset, a freeloading mentality, which has been largely responsible for hampering the commercial development of the airline since it began. The Air Malta employees with ‘real’ jobs, jobs that were needed, jobs which they fill and filled on merit, have been imperilled by the dead wood and dead weight of those for whom jobs were created because of political cronyism, who were put on the Air Malta payroll as a sort of partisan social service.
For years, Air Malta was treated like a piggy-bank to be raided by politicians perfectly positioned to do the plundering. Jobs with Air Malta were found for constituents and party canvassers of both sides of the political divide, but most appallingly by the Labour governments of the 1970s and 1980s. That is why so many of the oldest Air Malta administrative and manual staff are diehard Labour supporters.
Perhaps it is fitting – a form of karma, perhaps – if they are now among those to be made redundant or offered (in)voluntary retirement, because they almost certainly did not get their job on merit. When the Holiday Inn opened in Sliema in the 1980s, Wistin Abela, the Labour government minister responsible for Air Malta, turned up with a small army of thugs wearing red T-shirts emblazoned with the legends ‘Wistin’ and ‘Air Malta’.
They stood among the assembled Holiday Inn dignitaries looking completely incongruous, except that to the other Maltese who were there, including me, that sort of thing was normal.
It really is the most terrible shame that those who got and kept their jobs on merit, who are hardworking and responsible for keeping the airline flying despite the difficulties, have had their employment future prejudiced because of that gravy-train culture of jobs as a social service or political favour.
Variations of that kind of freeloading have been institutionalised at the national airline. The free-flights programme (backed by the Maltese bumming attitude where getting something for free obscures all other issues linked to the freebie) had reached the ridiculous level where being given a directorship at Air Malta – for that is how it was thought of, rather than being appointed to the board with all the attendant commercial and legal responsibilities – was viewed as a reward for political favourites.
This is because directors at Air Malta and their entire families are entitled to free flights for life, even when they cease to be involved with the airline or sit on its board.
It’s hard to credit, but there you are. Under the incoming chairman, no-nonsense Louis Farrugia, this will be the first thing to go. Imagine the resentful muttering.
But the freeloading has been much worse than that, and truly reveals the way in which government after government has seen Air Malta as something to be bummed off, even as rescue measures were spoken about. Anyone who is or has ever been a member of parliament, even if only for just a few months in 1973, has free flights with Air Malta and so do members of his or her immediate family.
You will agree that this is a wholly abusive situation and was possible only because politicians thought they owned Air Malta and behaved accordingly. The result is what we see today.
I wish those Air Malta employees who got their jobs on merit and not through cronyism the very best of luck. I don’t ever remember a time when I have received anything other than excellent service from the national airline, except for one farcical ‘work to rule’ incident when in-flight staff, in the midst of worldwide turmoil in which airlines were collapsing in bankruptcy and thousands losing their jobs, refused to hand out the newspapers or meals that were sitting there for passengers.
Meanwhile, politicians can discover the novelty of paying for their own flights like the rest of us, and about time too. It is bad enough that their malfunctioning and arbitrary consciences permitted them to take free tickets from a crippled airline, further putting hundreds of jobs in peril.
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What I cannot understand is the timing of such draconian measures, right in the middle of the tourist season. It is to be expected that some political opportunists will tare advantage of the situation and timing to call strike action.
I hope that this restructuring will be a take-off for the airline, not an emergency landing.
Looking at the numbers of staff being made redundant, it is actually like we had two airlines rolled into one – literally a duplication of resources.
Here we go again . . . PN’s solution to the Socialist-created behemoths that haemorrage public funds: throw even more taxpayer money at ’em! cf Drydocks, Kalaxlokk, Sea Malta etc.
Eventually, a political party will be formed, or perhaps existing ones will realise, that the taxpayers who make everything possible in this country, have a vote and can use it.
Until then, the gravy train, ie political patronage giving you a cushy job and a free house (on top of education and health care) will roll on, despite the fact that it loses a wagon every now and again.
What you state is correct but the major problems facing the company are not freebies and overstaffing. Air Malta pays over the odds for certain services, charges way below the industry average for others (in order to help local companies) and has to compete against airlines flying to the same catchment area whilst receiving state subsidies to do so.
At the same time, management that have helped wreck the company are never made accountable.
Good read….. as usual….. albeit blaming the Labour Party for Air Malta’s troubles is not realistic and does not reflect the real reason which led to the downfall of the airline. How can you blame the Labour party for this mess if the PN is managing air malta for 23 years?????
[Daphne – Please don’t use so many interrogation marks. One is sufficient. Using multiple exclamation and interrogation marks makes for negative perception of whatever you write. Even if it makes sense. It says ‘please don’t take me seriously.’ This is advice, not criticism.]
Indeed, blaming the political system (which has been exclusively PN for two decades now) is the actual reason of the downfall of the national airline.
Let us hope the new board and excecutives manage to turn it around!
I agree with your approach in this article.
People like me who worked (and were made redundant) their whole lives in the private sector don’t feel any solidarity with workers of bottomless money-pits which we call parastatal or state-owned companies.
Air Malta was a cash cow because it had a monopoly. We were charged double for a simple flight to Europe (Lm250).
So through my taxes and through the exorbitant flight tickets we kept our airline flying, not because we liked the service, but because we were coerced to use it. My Italian boss used to angrily say “Sono costretto ad usare Alitalia.”
I was made redundant some years ago. I had no politicians coming my way to help me. I wasn’t given a month’s salary for each year worked. No one offered me another job with another state-owned entity. On the contrary, I had to wait weeks to get the release from my previous employer. I had to go and fight at the Department of Industrial Relations and get what was rightfully mine after several weeks, and got another job on my own steam. I lost money.
Now many of these cronies want to jump the queue and demand a government job where they would continue skiving work AND grumbling against the government.
I know party cronies ‘working’ with Air Malta who have no qualifications and earn Euro 28,000 p.a. and do another job as security persons.
They should be helped to get a job but they should get what they merit for their qualifications.
“…it should have happened years ago but nobody was able or willing to bite that particular bullet.”
And once there was a government-owned phone company, and banks, and the Malta dockyards, and Sea Malta, etc. And now there is a thriving Freeport, HSBC, diversified telecommuncations industries, various other privatizations, Smart City (Tecom), low-cost airlines, competition in the (natural gas) energy sector, and soon Arriva.
For the alternative to what Air Malta has been we could be looking at Greece today. Their bullet to bite is even bigger than ours (and with their EU support, Malta also shares in the Greek debt), and we have Italy, Spain, and Portugal, and Ireland, too.
And there is the UK outside the Eurozone; and the US economy is not sparkling either; and Japan has had its recent combined catastrophies with disastrous economic consequences after years of former economic woes. The 2008 world economic crisis is still chasing us all (and might catch us yet).
The direction of economic policies of Malta’s Nationalist government have been clear and methodical. As for Labour’s potential policies, we may have to look at the words and actions of the GWU to discern Labour’s silence (or foot stomping or shoe banging), or we may look back upon Labour’s “glorious past” to divine its potential future (there was the more recent explosion in national debt under the Sant administration, 1996-1998).
But in the case of politicians milking the proverbial cow dry, both parties have been guilty regarding Air Malta. We are not out of the woods yet on this one.
So far, direct foreign investment (and EU membership) has been the way forward in the recent decades.
I sincerely hope this won’t turn out to be a repeat of the end of Sea Malta.
[Daphne – Sea Malta didn’t end. It was sold.]
Sea Malta was not sold, Sea Malta was liquidated. Her only assets where; two ships, the Maltese Falcon and the Zebbug, and a lot of well qualified, properly trained and hard working officers and crews.
Both ships were sold after some time at layup and all officers and crews made redundant overnight without getting anything not even what was due by law let alone what was due by agreement.
Grimaldi Naples purchased the Falcon for a pittance. The monies are still held by Maltese courts, since the crews are saying that they have a right for their redundancy schemes as required by their agreements with the GWU.
Sea Malta was a good training school for the Maltese shipping industry. No company is training any Maltese seafarers any more. Look at all the Maltese owned vessels and local companies. None of them sponsor any cadets any more
What I meant was a sort of warning to the unions.
They tried to bully the government over Sea Malta. They ended with the short end of the stick, when the government said we either sell it or declare it bankrupt (with all the resulting hardships).
My humble advice, Don’t over react, you might end up having many, many more redundances.
The Hotel Phoenicia saga all over again !
Excellent, Daphne, and well put. Your article pretty much covers all the issues. The tragedy of all this is that Malta had to join the EU for this to be sorted out. Which is, after all, the reason why all of us pro-EU supporters wanted Malta to join the European Union, because we have more confidence in the free EU market than we do in our own government.
It is something for which we should be eternally grateful to the PN for, in that we now do not need to depend fully on either the PN or that eternal joke of the MLP to get our house in order.
It’s a well-penned opinion piece. [Daphne – Gosh, thanks.]
However you failed to mention three important points:
The first being Lawrence Gonzi’s serraħ rasek letter to Air Malta employees guaranteeing their job on the eve of an election when Air Malta was already in red. This brings me to question GonziPN’s bona fide in this issue..
Secondly, I wouldn’t blame Labour for Air Malta’s losses. The airline was always profitable under Labour, and likewise throughout Eddie’s first legislature – for the record.
[Daphne – That had less to do with the government of the day than it did the operations conditions of the airline industry in general at the time, Andre. It’s a little bit silly to take Air Malta’s perilous state entirely out of the context of a scenario in which several European airlines have gone bust and airlines worldwide are in peril. What we have today is the legacy of poor employment decisions in the past, and poor decisions by management in worsening economic conditions over the last few years.]
Our national airline got it’s greatest hit under Joe N.Tabone’s chairmanship – RJs contract, Azzurrair ‘investment’, Toto Riina/Andreotti links and so forth. These episodes drained Air Malta of its reserves, which could have cushioned the other latest impact affecting Air Malta, being the fuel hike during the last three years.
[Daphne – If you wish to be taken seriously, don’t blame Tono Riina and Giulio Andreotti for Air Malta’s problems. It makes you sound like a book written by Joseph Muscat for Sensiela Kotba Socjalisti.]
Thirdly, Air Malta’s head count is relatively high compared to other competing airlines – true. However, Wistin’s constituents have retired by now and lest we forget – as you swiflty admitted – successive PN governments have used Air Malta just for that very same reason.
[Daphne – Wistin’s constituents have not retired, no more than I have done. We’re talking 24 years ago, not 44. It wasn’t only Wistin’s constituents who were abusively employed at Air Malta under Labour, nor were they all manual workers or unskilled personnel. I know several people personally who were taken on there because of their political connections. Most of them are there still. ]
I wonder whether any of the redundant pilots or engineers have been employed by a Labour Minister.. Further still, cargo handlers and other members of staff are nowadays redundant precisely due to Air Malta’s policy of farming out its services which could have otherwise be carried out by its own staff.
[Daphne – Pilots and engineers do not need political connections to get a job with an airline. Maltese pilots were all trained specifically for Air Malta. It’s not as though they could get work elsewhere. As for farming out services – you show scant understanding of commercial operations. Businesses farm out whatever they can. It no longer makes sense to keep people on the payroll to do things that can be bought in. I trust you are able to work out why, even though you are a Labour supporter and Labour supporters tend to have great difficulty understanding simple business concepts or working out why a business cannot be run like a social service.]
Sorry, I cannot trust this government with Air Malta’s restructuring. Having appointed the ‘special one’ Ernst Funk in the past, PN-strategist Lawrence Zammit and others to the fold, I would say there is no genuine interest in resolving Air Malta’s problems. To the contrary, PN governments have considered Air Malta as a fiefdom offering its top positions to friends and activists in return for their handsome contribution towards the party.
[Daphne – Sure, that’s why Air Malta was headed by Louis Grech, a known Labour supporter and current Labour MEP for so many years under successive PN governments. But you knew that, didn’t you. Or didn’t you?]
“Grech has formally written to the European Commission Vice-President Joaquin Almunia, to stress the need for his ‘consideration’ of an aid package that is in full respect of EU state aid rules and that “ensures vital support” for the airline.
He blamed “hard times as a result of a new, harshly competitive environment” as the reason for Air Malta’s current crisis, and explained that while such circumstances have broken ‘many an airline’, Air Malta has used its internal resources – not taxpayers’ money or subsidies – as has been the case with a number of EU carriers.
According to Louis Grech, the main problems affecting Air Malta’s current performance are tied to hiked fuel prices, fluctuating exchange rates, the economic recession and cut-throat competition.”
http://www.maltatoday.com.mt/…/air-malta-mep-louis-grech-writes-to-almunia- ‘allow-granting-of-vital-support’
The four factors cited by Mr Grech, which you quote here, are not unique to Air Malta.
We will now probably go through a phase of trimming the airline, getting rid of the excesses and then selling a majority % to another airline. In principle it can work yet the value and terms need to be clearly addressed.
Hopefully we will retain some controlling interest to be able to still have some leverage as against the situation at MIA. Even though the airport had a major transformation it could have been probably sold with a degree of different terms and conditions.
And about fricking time too. Any debate about Air Malta automatically triggers yet another national defence mechanism, viz. We are independent, hence we need a national carrier, hence we need Airmalta f’idejn il-Maltin.
I hope to god the whole airline will be sold lock, stock and barrel. That should dampen our narcissistic patriotism.
Baxxter, if the government is to sell Air Malta, it had better sell it now. As I suggested in a previous comment above, it can now actually sell two of it, given that after shedding half of it, the government is still going to be left with what is believed will be a viable company.
Actually, I think we do need a national carrier, not because we are independent but because, as a small island nation good air (and sea) connections are a sine qua non to economic development. Without them, the economy would quickly collapse. And yes, foreign owned airlines wouldn’t give a toss about Malta’s economic problems if pulling out meant improving their bottom line.
I’ve more to say, but no time right now.
The way I see it, Tim, the demand exists, so the market will provide the supply.
At present we’re in virtual slavery to Airmalta, which holds the monopoly on flights out of this blessed rock (I don’t count inbound flights, for reasons of mental sanity). It’s a minuscule company, with a tiny fleet a huge overheads. If Malta were served by some decent-sized company (I have dreams of Air France-KLM-Airmalta airhostesses in Christian Lacroix uniforms….) some of those overheads would be shared over a larger number of bookings and flights.
Airmalta then liberally sprinkles salt onto our wound with the facetious “Grazzi talli ghazilt li ttir ma’ Airmalta….”
Bhallikieku kelli xi ghazla, sinjorina.
@ Baxxter (27 June 2222hrs).
I agree with you in principle but I’m afraid I have to take a narrowly partisan view here.
I live in Vienna and fly to Malta about 5 times a year. KM is the only airline flying direct, and usually the cheapest too, so if Km fold I am seriously worried that I’ll have to go via Frankfurt or Munich, taking an extra 2-4 hours and paying an additional €100 – 200 each time. Not an amusing prospect. And there are many cases like mine, I’m sure.
If anyone at Ryanair is reading this, perhaps he/she would consider operating to/from Vienna or Bratislava and Malta. I’m pretty certain that the route would be profitable. I tried to find your e-mail address on your website, but it seems that you only encourage people to contact you to book a flight or to complain. Suggestions don’t seem to be welcome.
That is precisely my point, Tim. Let’s try a little Gedankenexperiment. Airmalta disappears, and the Vienna-Malta route is no longer serviced. But you and hundreds of other passangers want a Vienna-Malta flight. Some airline sees the market demand, and steps in to provide the service. So we have a direct flight after all. Malta is a niche desination, and Airmalta practically holds the monopoly. That is why other airlines aren’t stepping in. The moment Airmalta disappears, they’ll be filling the gap in the market. At lower prices.
My point is, Air Malta wasted all its reserves to make good for bad management decisions in the 90s. Since then, it never managed to recover these losses precisely due to the challenging times witnessed lately by the aviation industry. You seem to be in agreement that RJs and Azzurrair were two such examples of bad management..
Note that KM employees had already agreed to a wage increment freeze and improved working practices back in 2004, when a rescue-plan had been signed by the management and the four unions representing employees. Workers did their bit. Sacrifices were made, cabin crew reduced, less overtime, Holiday Inn & Hal Ferh sold, and yet? Seven years down the line we’re back to the drawing-board due to sheer mismanagement.
Air Malta could have expanded its operations, open up new routes and enjoy subsidies (now taken by low-cost airlines), in order to maximise the potential of its ‘excess’ workforce. Downsizing operations, such as reducing aircraft fleet and outsourcing would obviously make a number of workers redundant. I have nothing against outsourcing if it is done gradually and enhance competitiveness – yet I’m told these outsourced services have cost Air Malta dearly and personal interests were involved.
Decisions have to be made. I agree that staying put would endager the feasibility of the airline, with all the economic ripple effects one could imagine. However, solutions have to include first and foremost, route analysis, pricing, promotions, load factor, subsidiary operations, and market penetration in Europe. Shedding workers is the easiest option. We had higher expectations from a €500,000 a year CEO and friends-of-friends.
At least, some sort of responsibility has to be shouldered by whoever appointed past Board members, approved decisions and promised job security to these employees in order to get their vote despite having sacrificed part of their income since 2004. The least one could do, is redeploy these workers somewhere else as their dismissal could lead to unforeseen hardships. 511 families are at stake.
PS: Under Louis Grech, Air Malta was profitable.
Er, when I was was made redundant, my family was at stake, and it led to untold hardships. Fuck ’em, I say.
Losing your job is never a good feeling, but what gets me is how some people think a job is a divine right. Gone are the days when you could get a job out of school and be guaranteed that job until retirement. The sooner everybody realises this, the better we’ll all be. I bet if more Air Malta employees thought that way, then there wouldn’t be 500 redundancies, as a lot would have jumped ship before. Who knows?
Somehow I believe it might have had the opposite effect as in anybody leaving might be tempted to stay on ‘ghas-somma’ golden handshake or early retirement scheme.
Excellent write up (what else is new?) – you are an asset to Malta, Daphne except when you waste your and our time shooting silly attacks on Alfred Sant and Joseph Muscat.
There are many issue to tackle in Malta and you have a good nose that smells many of them. Block your nose for Alfred and Joseph – pleeeaaase!
[Daphne – Alfred Sant? Alfred Sant? When was he last relevant? And for heaven’s sake, Joseph Muscat is the future prime minister and current Opposition leader. If he isn’t a relevant issue, then I don’t know who or what is. I will never understand some people, honestly.]
Come on, Daphne, Alfred Sant was relevant – in case you forgot, he was also our Prime Minister.
[Daphne – Yes, was, not is.]
Joseph is the future Prime Minister, but frankly I don’t care if he is blonde or brunette or bald or wearing toupee. Please concentrate on their role as a politician – blast them if they need it but don’t waste your time on their cosmetic looks after all, you women spend long hours in front of a mirror before you go out.
[Daphne – No, I don’t. Men spend far longer in front of the mirror before they go out than I do because they shave. And besides, for the 100th time, it is acceptable for a woman to wear make-up and it is entirely normal, but men with wigs are something else. So don’t make the stupid mistake of comparing the two.]
Quick Ciccio, run for your life! Daphne’s let the cat out of the bag re. male preening.
First time I saw Sant’s wig I pissed myself out loud in a large group of people.
It was an emperor’s new clothes moment.
Daphne you are so lame……. it is acceptable for women, not acceptable for men – yeah right! When someone pointed out that the place for women is at home to take care of the family you were quick to protest and ridicule the commenter. You want equality or rather you want to be more equal than men!
The truth is that Joseph is so upright that you can’t find any corners to attack him on so you resort to personal attacks on his appearance. That is evil and vile and unacceptable coming from the mouth of a journalist.
“That is why so many of the oldest Air Malta administrative and manual staff are diehard Labour supporters”
Airmalta’s new Chairman and CEO have reiterated that if the voluntary retirement schemes are not taken up or not taken up sufficiently, then the airline will follow a last in-first out policy.
This would ensure that the diehards you referred to remain in place.
The diehards will go because they will find it hard to work and find their handout attractive. By Malta Drydocks standards one would get Euro 55,000 for being an Air Malta employee since the seventies.
Well at least people who are being paid by us in the private sector get thousands as redundancy money. We will get nothing if that happen to us.
I hope that the MPs and ex MPs will also have the same pensions as all of us aswell. If the government said that in the private sector ministers will get much more money the income tax doctors, lawyers etc.should be much higher ! Does the E.U. know that only us mugs pay the right tax in Malta !
How many people are victim of a ‘freeloading mentality’?, I ask. Probably the 80/20 rule applies here – 80% of PL supporters believe that ‘the government’ owes them a living, i.e. an easy job-for-life as a civil servant, free housing, medical care and education for the children as well as child support and subsidized utility bills. At risk of being branded an anti-southerner, I will add that this mentality seems to be more prevalent in the PL-leaning south of the island. 20% of PL supporters, on the other hand (mainly living in the north) are prepared to work for a living, though they still insist on ‘free’ education, health care and housing, as well as a ‘kamra’ at ‘Torri l-Abjad’.
Amongst PN supporters, most of whom are self-sufficient and preopared to work for a living, it is probably 20 % (mainly the ‘suddisti’) who, infected by the thinking prevalent in their locality, believe in an easy job for life, free housing, etc, etc,
So, according to my calculation, about 50% of the population believe in freeloading. I’d say that at least this percentage of people believe that the government is solely responsible for the price of electricity, regardless of the price of oil.
In this context, Air Malta has no right to exist. Most of the 15 pilots per plane – can anyone explain this to me, please? Why does KM have 15 pilots per plane? – will expect to be paid for doing nothing. The sad thing is that half the people reading this will agree with them.
Unfortunately, Malta is in a virtually unique position of being a small independent island state on the periphery of Europe. Maybe Iceland can compare but otherwise? This means that an airline with good connections is absolutely vital for our economic well-being. Can you imagine air freight taking 2 or 3 days to reach European consignees? Unthinkable! So a small KM loss could be accepted in the greater scheme of things, but €36 million annually? I don’t think so…
The spanner in the works is MIA, owned by Vienna Airport, which is currently facing a huge scandal in the expenses on its new ‘Skylink’ Terminal, which is 945 MILLION Euros over budget – unbelievable but true – and consequently which, in the monopolistic situation it enjoys in Malta must screw as much revenue as possible out of its captive clients in Malta and so crucifies KM with rates of – what? – €25 a head. Scandalous!
What a f—ing joke! Min jahxi l-izjed! U t-taxpayer jidghi!
P.S. Julian Jäger, CEO of MIA is being touted by the socialist party here as the future CEO of Vienna Airport…
Bottom line – kulhadd jahxi kemm jiflah! How can you not be cynical?
Anarchy is the only answer, say I. Stuff democracy, it has failed us badly!
Tim, the whole of Malta is “the south”. We’ve got PL in our blood, damn it.
Yes, democracy has failed us. We got the worst of the worst, because governments are elected by the people, and what do the people love? Chavs, coatti, hamalli, oafs, subliterates, Catholic fundamentalists, xenophobes and small-minded islanders.
As for anarchy, unless you have The People on your side, it’ll be over before it even starts. I don’t intend to be the Maltese Robert-François Damiens and have the whole goddamn establishment tut-tutting condescendingly while I’m in my death throes.
My point is, Air Malta wasted all its reserves to make good for bad management decisions in the 90s. Since then, it never managed to recover these losses precisely due to the challenging times witnessed lately by the aviation industry. You seem to be in agreement that RJs and Azzurrair were two such examples of bad management..
Note that KM employees had already agreed to a wage increment freeze and improved working practices back in 2004, when a rescue-plan had been signed by the management and the four unions representing employees. Workers did their bit. Sacrifices were made, cabin crew reduced, less overtime, Holiday Inn & Hal Ferh sold, and yet? Seven years down the line we’re back to the drawing-board due to sheer mismanagement.
Air Malta could have expanded its operations, open up new routes and enjoy subsidies (now taken by low-cost airlines), in order to maximise the potential of its ‘excess’ workforce. Downsizing operations, such as reducing aircraft fleet and outsourcing would obviously make a number of workers redundant. I have nothing against outsourcing if it is done gradually and enhance competitiveness – yet I’m told these outsourced services have cost Air Malta dearly and personal interests were involved.
Decisions have to be made. I agree that staying put would endager the feasibility of the airline, with all the economic ripple effects one could imagine. However, solutions have to include first and foremost, route analysis, pricing, promotions, load factor, subsidiary operations, and market penetration in Europe. Shedding workers is the easiest option. We had higher expectations from a €500,000 a year CEO and friends-of-friends.
At least, some sort of responsibility has to be shouldered by whoever appointed past Board members, approved decisions and promised job security to these employees in order to get their vote despite having sacrificed part of their income since 2004. The least one could do, is redeploy these workers somewhere else as their dismissal could lead to unforeseen hardships. 511 families are at stake.
PS: Under Louis Grech, Air Malta was profitable.
I have nothing personal about Mr. Louis Grech, but your statement that under Mr. Grech Airmalta was profitable is simply not correct. The audited financial statements of the group from 1999 to 2003 show annual losses from 2001 to 2003.
And there were significant annual losses in the associated companies of the group at least since 1998.
No credit can be given to any claim that the losses came from AzurraAir or RJs – those investments were made pre-1996. Malta changed government in 1996. Therefore, it was Mr. Grech’s and his board’s responsibility to divest or administer those investments in the best interest of the shareholders.
The truth is set out in this statement made by the new Chairman, Mr. Lawrence Zammit, in his Chairman’s Message on the results of 2003:
“Our financial results for the period have been affected by the conscious decision the newly appointed board of directors took to start the process of exiting the group’s investment in AZZURRAair. A write-off of no less than Lm14.1million (Euro33 million) has been made to recognise the high operating losses suffered by this company in the year under review, together with any other residual costs which Air Malta may incur in respect of this investment.
In addition, a provision on onerous contracts of Lm7 million (Euro16.4 million) has been made to reflect the shortfall in income and the additional costs which are expected to arise on the Avro RJ aircraft previously sub-leased to AZZURRAair.”
Daphne excellent piece of work as usual. You hit the nail on the head throughout. It’s a pity that the tax payers who declare their income and work on their own steam and who in reality are the main contributors to the local economy are still carrying the burden of sustaining such corporations that where widely used for political favours.
Well done for PN who tackled Dry Docks, Sea Malta and now Air Malta. Justice is being made. Our money should continue to be administered by the Government for the common good such as health, education, road infrastructure and recreational parks for all and not to reward the inefficent. That is, if we are not aiming to follow Greece’s footsteps.