Air Malta terminates employment of Selmun Hotel workers

Air Malta has advised the union representatives of the 58 employees at Selmun Palace Hotel, a subsidiary of the national airline, that their jobs are to be terminated.

The decision was taken during the first meeting of the new board of directors chaired by Louis Farrugia.

Selmun Palace Hotel has accumulated losses of over €13 million and had ceased operations on 3 January 2011. The airline said it was still incurring expenses related to wage bills, licences, insurance and other expenses. The employees were officially communicated the decision in a meeting held this afternoon.

The hotel has not yet been sold since it went on the market some four years ago. Air Malta chief executive Peter Davies said the revenue generated from the sale will offset the accumulated losses and assist Air Malta in its current restructuring exercise.

“Selmun Palace Hotel is a strategically located hotel and an excellent asset and Air Malta will be doing it’s very best to maximise the revenue it can generate from its sale,” Davies said.

Consultations with the unions will commence next week. The airline also advised the director of employment and said it will be honouring the collective agreement, with termination payments being issued accordingly.

Davies said that terminating jobs of employees was a very tough decision and a last resort: “This is naturally a very difficult day for the Selmun Palace employees and also for Air Malta. It is always extremely hard to terminate jobs but the national airline did not have any option.”

Davies said the airline had unsuccessfully tried to sell the hotel and save jobs, but the airline had to start taking challenging decisions to significantly cut costs and raise its revenue from core business.

“This does not necessarily mean this is the method we will be adopting to reduce the airline’s workforce. It has already been announced that as part of the restructuring process Air Malta will be reducing its workforce.

“There is a difference between Air Malta employees and employees of an independent subsidiary company not operating in the aviation industry. No decision has yet been made and all options are still being considered as to the method that the airline will be adopting to reduce its headcount.”

Davies appealed to all stakeholders to avoid speculation “that can cause unnecessary distress amongst Air Malta employees.”

All financial creditors’ balances of the Selmun Palace Hotel will be settled in full, the airline said. The airline is e embarking on a local and international process to sell the property or the company, engaging local agents to advertise through their international network.