Chamber on Air Malta downsizing saga: severance cheaper for country

The Chamber of Commerce has blamed Air Malta’s failure on inflated take-home salaries paid to its workers, in a statement on the multi-million severance package to downsize the national airline.

Around 600 workers could be paid redundancy packages after the finance ministry failed to transfer airline workers into the public sector and the public service, owing to the inability of matching salaries.

“The starting negotiating position of guaranteeing their inflated take-home pay, which was a contributing factor to Air Malta’s failure, makes it virtually impossible for them to be employed anywhere where their pay can be justified. The Malta Chamber is cognisant that in these circumstances, severance payments may very well work out cheaper for the country than burdening the public sector with hundreds of superfluous overpaid reluctant workers indefinitely.”

But the Chamber said the basis on which the amounts being offered had been arrived at should be clarified. “The Malta Chamber believes that these amounts appear to be absurdly high and illustrative of how the bargaining power of overly protected groups results in unfair outcomes for the country as a whole.”

Reports of the severance packages for Air Malta employees negotiated by unions with government have provoked anger among taxpayers and private sector operators who uphold performance-based standards for compensation.

“The salary expectation of hundreds of Air Malta employees are not commensurate with their competence and willingness to be productive. They therefore could not be absorbed by the public sector and would not fit in the private sector either,” the Chamber said.

“Following years of being paid hefty salaries for questionable output at the national airline that bled millions every year they are now being given a six-figure golden handshake costing the country around €50 million.”

The Chamber said the Air Malta saga was the culmination of decades of unsustainable employment practices and vitiated political interference in the running of the national airline.

“Other government-owned entities are susceptible to similar extravagances, and are unlikely to ever be brought to the reckoning by the European Commission, as Air Malta has been. The Malta Chamber is particularly concerned that we will continue paying millions in hefty salaries and superfluous spending at other entities unless a credible framework for the monitoring of the performance of such entities that is ring-fenced from political interference is put in place.”