Air Malta pilots ask for better pay - Curt Lewis

Bid to entice Air Malta pilots with tax-free option on part of their salaries

Stalemate in talks as end-of-year deadline looms over Air Malta

The government is considering offering Air Malta pilots a tax-free option on part of their salaries, based on flying hours, in an attempt to break the deadlock in negotiations over a new five-year collective agreement, informed sources have said.

Tourism Minister Konrad Mizzi had set an end-of-year deadline for concluding the talks. "Dr Mizzi's self-imposed deadline is fast approaching, and it is by now clear that the pilots will not accept what's on the table," a government source said.

"As a last-ditch attempt, the minister is now trying to lure pilots with an unprecedented offer which, if given, would most probably get Malta in trouble with the EU, because it would amount to state aid."

The Sunday Times of Malta was informed that the government, on Dr Mizzi's orders, is studying the possibility of waiving income tax on part of the pilots' salaries, with the amount to be based on the number of flying hours.

The source said Dr Mizzi was basing his argument on the fact that most flying hours are performed in international skies and are therefore not taxable in Malta.

However, Dr Mizzi has already been warned, by Brussels and the Finance Ministry, that the proposal should be dropped, according to the source.

"From the EU's point of view, this will surely amount to State aid - something that would land Air Malta in trouble. Secondly, the argument that pilots are working in international territory does not make any sense, as according to international law, an Air Malta plane is considered part of Maltese territory," the source said.

"Third, the measure would create a precedent, as the cabin crew, who are in exactly the same situation as cockpit staff, would be up in arms claiming discriminatory treatment."

The pilots' union, ALPA, is the only one of the four Air Malta unions which has not yet concluded negotiations on a new collective agreement.

Prime Minister Joseph Muscat last week tried to give a helping hand to Dr Mizzi by warning pilots that if they did not accept what was on offer by the end of the year they would be putting the national airline in jeopardy.

However, their union is known to be pushing for a better offer. They have been offered a 20 per cent pay increase over the next five years but are arguing that this is not enough, as their flying hours are set to increase.

"The 20 per cent increase is only on paper, as we will be working much more to earn it. Also, conditions will be changing drastically, and this needs to be compensated fairly," a veteran pilot said. Despite earning an average of €120,000 a year, pilots argue that compared to pilots of other airlines they are underpaid.

"Unlike other Air Malta staff, pilots have always managed to get whatever they wanted, as they negotiate from a strong position," an industry source said.

"While it is easier to replace cabin crew and other staff, it's not easy to replace pilots in a short time."

A spokesman for Dr Mizzi declined to comment on the state of negotiations with the pilots.

This morning, on twitter, Dr Mizzi described this report as 'a fabrication saying the government is not considering tax free salaries for pilots.

The airline currently employs 115 pilots.

Dr Mizzi has told Air Malta staff that banks will not provide the much-needed credit lines to the airline if the collective agreements are not wrapped up by the end of this year.

Air Malta closed the last financial year, ending in March 2017, with a loss of more than €13 million. Two years earlier, then Tourism Minister Edward Zammit Lewis and then Air Malta chairman Maria Micallef promised that the airline would break even during the same timeline.

Dr Mizzi is now promising that the airline will break even by March 2018.