Pilots each get €750 when Air Malta cancels leave day

Tens of thousands of euros are paid by Air Malta to its pilots during peak months when the airline has to reduce just one day of leave to keep more pilots on its busy schedule and workload, the company has told MaltaToday.

As the airline struggles with new demands by pilots' union ALPA to increase cockpit staffing, Air Malta's chief executive Peter Davies has vowed to take on the union and stop "a mentality where they think Air Malta is their private flying club".

Davies presides over an EU-mandated restructuring plan that has to see Air Malta in the black by 2015, but complains that the collective agreement for pilots is costing the airline cash that other competitors do not have to pay out.

According to the pilots' collective agreement, Air Malta ends up paying €750 to each of its 110 pilots if it has to strike off one day of leave when it doesn't have enough pilots to fly its planes during busy months. The airline says that it has paid up to €82,000 in one peak month alone, due to this liability.

The math is complex. Air Malta has to allot seven days of leave to each of its 110 pilots, for each period of four months, irrespective of the airline schedule. Apart from their 26 days of annual leave, pilots also get a statutory 'day off' after flying that amounts to 38 hours rest – running from 10pm on the first day and ending at 12pm on the third day. On average, pilots will fly some 56 hours a month.

So what happens when a substantial number of pilots request their leave during a peak summer month, like September? If the airline has to strike off a day so that it can keep up with its busy workload, the penalty is €750 for each pilot employed during that month: specifically, it’s the sum of €250 daily for three days, in lieu of the cancelled leave day.

"Does that happen anywhere else in the private sector?" Davies asks, his gripe coming days after ALPA ordered its pilots on a symbolic dress-down after claiming that Air Malta had cancelled approved leave requests. "It was a mistake in scheduling that saw six pilots' approved leave cancelled. But we were in communication with ALPA to tell them we would be rectifying the error," Davies says.

Additionally, Davies says that given the way leave has to be allocated, the airline must necessarily employ an extra eight pilots throughout the year at a cost of €500,000, a cost which he says competitors do not have. "It means that we have to sell an additional 5,000 seats... it's a cost our competitors do not bear so their seats are cheaper."

While ALPA says that the airline must employ more pilots, after complement was reduced to 110 following an early retirement scheme, Davies insists that increasing pilot numbers is counter-productive. "This would increase the 'leave day' liability. If we deny leave, more payments have to be made to more pilots. To eliminate these leave payments [meaning having enough pilots so that no leave gets cancelled] the airline would require 17 more pilots at a cost of €1 million. This is neither an option, nor is it allowed by the restructuring plan."

Intent on achieving a turnaround for the airline, Davies and Air Malta management remain at loggerheads with ALPA over the pilots' collective agreement. In Europe, pilots cannot fly more than 900 hours in a year. In the extreme, Ryanair works their cockpit crew to the maximum allowable. Air Malta pilots fly an average of 600 hours a year, regulated in part due to their 38-hour statutory 'day' off.

So over the past seven months in 2013, Air Malta pilots have flown an average 56 hours each month. Air Malta believes they should be flying for some 75 hours each month, earning a commensurate package that reflects increased flying time. Air Malta currently pays its cockpit crew a total of €9.4 million annually. But resistance to changing the generous allowances that the collective agreement offers has prevented this change in working practices.

"The only way to prevent the expensive liability of cancelling leave days, is through intelligent rostering," says chief flight operations Captain Mark Micallef Eynaud, who adds that ALPA's claims that approved leave was cancelled is "deliberately misleading".

"Only 4% of total leave requests so far were not approved... in September, a peak month for the airline, 12% of the pilots are on leave, apart from an average of 11 days off for each pilot throughout the month. How can 12% of pilots be on leave in a peak month?" Micallef Eynaud says.

Keen on suggesting that they are locked in some union's straitjacket, Davies points out that work practices at Air Malta have been radically changed since cutting down workforce as part of the airline's restructuring plan. For example, as we speak we are in his office in the open-plan layout of the new Air Malta headquarters at MIA's Skyparks business centre. Up until 2012, the airline's departments were split up between six different buildings in what used to be the Royal Air Force command during WWII.

"The company was disconnected before. Now a new sense of camaraderie has been developed, colleagues actually know each other. They can see that the company is about processes, and people communicate better and get problems fixed," he says of the change in mentality that broke a 30-year 'way of doing things'. "It changed the very psychology of what was happening."

While Davies seems confident that he can count on the support of Air Malta's workforce, pilots seem to be occupying the last pocket of resistance to the Welshman's radical management changes. "We have no issue with our pilots. The executive of ALPA, and the Union of Cabin Crew, seem to think Air Malta is their private flying club, but we have to change this way of thinking."

Surely he must be expecting some kind of support from the government, even though his own appointment came in for some criticism by the same party when it was in opposition. "Any support from the government should start from the very fact that it is the shareholder of this company... when push comes to shove, the government should always support the airline," Davies says.

"Air Malta is resolute that it will continue to meet the requirements of the restructuring plan because failure is not an option. We're committed to continue pushing forward its transformation into a profitable airline that contributes positively to the economy of Malta and provides secure and rewarding careers to its employees."

Air Malta: pilots' dispute

Airline pilots' union ALPA has instructed its members on a symbolic dress-down after it registered an industrial dispute with national airline Air Malta.

ALPA says that in the past year the crew compliment of Air Malta was reduced by 16 pilots and for the last few months most of its pilots have been working on an excessive amount of off-days, which they say leads to crew fatigue.

"This demonstrates that there is crew shortage, something which ALPA pointed out to the management on numerous occasions, both before releasing pilots on early retirement schemes and before releasing pilots to work for other airlines," the union said.  "Crew shortage is most probably the reason why recently pilots have been denied approved leave slots for the months of August and September, which is a manifest breach of collective agreement between Air Malta and ALPA."

But Air Malta says pilots are able to fly more hours, earning the salaries they would expect. Currently, a first officer with Air Malta is paid €61,775 while a captain is paid €106,038 on average in a year.

Air Malta says flight hours are naturally higher in summer because more tourists come to Malta during this season. Having limited pilot numbers to 110 in its restructuring plan, Air Malta offered early retirement schemes to 11 pilots aged over 50 with at least 20 years' service, after the collapse of Polish low-fares airline OLT last year, to whom Air Malta had leased 10 pilots.

Air Malta also says that leave requests from pilots climb in the summer months, with 4% pilots on leave in April 2013, 5% in May, 8% in June, 12% in July, 9% in August, and 12% in September.