Yesterday, Air Malta published news that over two-thirds of air Malta employees eligible for a voluntary employee transfer scheme have applied, as the struggling carrier undergoes extensive restructuring.
Ongoing Restructuring at Air Malta
Due to ongoing restructuring, the Maltese government created a voluntary employment transfer scheme to help cut employee numbers in half. The project was available to every air Malta employee except its pilots. Since putting out a call, the carrier received 571 applications from 824 eligible employees by the time the scheme closed on February the 11th 2022. This amounts to almost 70% of its eligible workforce.
Eligible workers will be transferred from the carrier to other government departments and maintain their current pay and working conditions. The first batch of 110 transferred employees will be at their new job in early March 2022.
Air Malta has set a target of bringing in workforce down to 420, meaning that it needs to cut around 450 employees from the book. it is predicted that majority of job cuts are to occur amongst the airline’s ground handling staff, where the most significant cuts are able to be made.
Originally the scheme was set to expire on January 31st 2022 but due to popular demand coupled with ack of clarity on working and payment conditions, it was extended to February 11th 2022.
Why Restructuring is Taking Place
The government, who majority own Air Malta, believes that cutting the airline’s workforce in half will save the carrier around about $16.9 million a year in wages. Nevertheless, rightsizing is only one of eight cost improvement opportunities to be implemented.
Alongside staff cuts, the restructuring plan announced last month includes a commitment to negotiate new collective agreements, and also cutting unprofitable flight frequencies and routes and establish bases in other European countries.
Furthermore, Malta’s government has approached the European Commission EC about state aid, but a decision has yet to be reached on this. This means cost-cutting measures will still go ahead with or without the commission’s help.
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