Ireland’s loss is Malta’s gain. Or is it?

The European Parliament this week approved a package of €7.5 million in EU funds, to help Ireland re-employ 850 workers left redundant by SR Technics Ltd’s relocation of its maintenance operations to Malta.

This capital injection was originally approved by the European Commission last March, a few months after the announcement that SR Technics, an aviation firm owned by Mubidala of Dublin, would set up a four-bay maintenance hangar and workshops at the Malta International Airport.

In its application for EU funding, Ireland argued that the redundancies could be directly linked to the reduction in air transport activity as a result of the global financial and economic crisis – thus qualifying for aid under the Globalisation Adjustment Fund.

“This crisis had a severe impact on the aviation industry, and that the numbers of passengers, air-miles and aircraft in service all declined,” the Commission proposal outlined. “As a result the industry was forced to seek cost savings in its maintenance, repair and overhaul (MRO) sector, and as contracts came up for renewal airlines sought the cheapest alternative. SR Technics lost important contracts with Aer Lingus and Gulf Air in the period, leading up to the redundancies.”

Ireland’s loss appears to have been Malta’s gain, as SR Technics’ operations in Malta has already employed 124 people, and the company is expected to eventually create 350 jobs in total.

Its first aircraft, an Easyjet Airbus 319 named ‘Pride of Malta’, rolled out of its maintenance facility aty the Malta international Airport late last month.

But the agreement that bought the company to Malta in the first place was questioned by Ireland, which complained to the Commission that Malta had resorted to ‘State aid’ to attract the investment.

The complaint was duly rejected, but the Commission accepted a separate request for funding to benefit the 850 workers left jobless by the move.

But while champagne flowed at the MIA hangar upon the unveiling of ‘Pride of Malta’, one former SR Technics employee claims that the company’s recent history bodes ill for the future stability of the 350 jobs it is expected to create locally.

Writing to the Malta Independent earlier this week, one of the axed employees warned: “As a former SR Technics Ireland employee with 32 years service I am very angry that the EU is supporting any new SR Technics venture. In my opinion Ireland should block any attempt to source EU funds for any planned SR Technics venture.”

The employee warned that SR Technics had sidestepped its legal obligations towards redundant workers.

“When SR Technics closed in Dublin it left over 1,000 workers redundant and left owing €26.5 million to the staff in pensions. SR Technics have refused to abide by the decisions of the Irish labour courts on the pension and redundancy issues. It appears they believe they are not bound by Irish or EU workers’ rights legislation as they are based outside the EU.”