Three key areas have been identified to stem the company’s losses: injection of capital, generation of revenue and lowering of operating costs.

Dr Gatt said the reasons for Air Malta’s problems were very simple, at the end of the day. “In the last three years, Air Malta’s core business has declined. Core business means passenger and cargo transport. And to put things very simply, operating costs have increased while revenue has gone down following 11 September (2001).”

Between August 2003 and January this year, said Dr Gatt, Air Malta had already made a loss of Lm5 million.

“We stopped funding to Azzurra Air last May, so these losses clearly show that the Avro issue has nothing to do with Air Malta’s figures being in the red.”

Every airline, said Dr Gatt, had had to deal with problems similar to Air Malta’s after the New York twin towers attack. “Other airlines with similar problems either folded or made mass redundancies. We want to avoid both scenarios.”

Dr Gatt said the Air Malta safety package hinged on three main issues: injecting capital, increasing revenue and reducing operating costs.

“As a gesture of goodwill, government has decided to make a Lm30 million capital injection regardless of anything. We must balance Air Malta’s books and carry on from there,” he said, adding that it was also imperative for Air Malta to strengthen its financial reserves.

“It was also agreed that Air Malta will sell off its hotels and the revenue would stay within the company. Then, of course, we must increase revenue,” he said.

Air Malta had already drafted its strategic and business plan for the next financial year, said Dr Gatt. “But no details are going to be given. Air Malta is a commercial enterprise in a fiercely competitive market. Nothing is going to be divulged unless it is requested by trade unions. But I stress, this will only happen on a strictly confidential basis,” he said.

“The formula is simple, if revenue = X, costs must be equal to X – Y. Every airline has cut down its operating costs and Air Malta can be no different. We must do the same,” he said.

Dr Gatt continued in his characteristic blunt, but perfectly truthful, way: “If people think that the rules of thumb that have applied to every other airline around the world don’t apply to us, there is something wrong in their head.”

Government, he said, is putting its money where its mouth is. “There is nothing new here, we are doing our level best to ensure that we avoid conflict and redundancies,” said Dr Gatt.

He said there was a solid base to build on, provided that everyone involved kept their feet on the ground and a level head. “We have finished negotiations with the four unions involved. People must understand that to get an Air Malta plane to fly you need a chain of events. You need all the ground staff and engineers. Then you need a pilot, but that is not enough, you also need a cabin crew,” he said.

Dr Gatt was trying to explain that he needed a clear consensus from all the unions to be able to activate the safety plan. “I do not want to be in a situation where one union hangs on until the last minute before agreeing to the proposals. We need everyone on board to try and make Air Malta viable again,” he said.

Negotiations with the unions had ended late on Tuesday night, said Dr Gatt. “On 16 April, Air Malta will have an extraordinary general meeting and I hope that I will have a consensus by midday that day. I have given them all a copy of the Safety Proposal and they all know what has been negotiated with each union,” he said.

Until then, he said, he will not be involved in any more negotiations. “If any of the unions require clarification on any of the issues, they can speak directly to Air Malta chairman Lawrence Zammit or the CEO Ernst Funk,” he said.

Dr Gatt said that although government was going to impose a six year moratorium on the company, the situation was flexible. “If by the fourth year things are going well and the company makes a profit, government is prepared to give frozen increments to staff,” he said. With a smile, Dr Gatt said: “If it makes a profit next year and this looks like a continuing trend, then we can do away with the Safety Proposal.”

The government was not going to make staff redundant, he said. “There are no guarantees – the only guarantee in life is death. But except in extreme cases, we will not be cutting jobs,” he said.

A proposal for voluntary redundancies, put forward by one of the trade unions, was also being considered. “We will also have a works council so the unions are able to monitor the situation,” he said.

While benefits and other forms of payment might be curbed, salaries would not. “But here I must stress that Air Malta’s pay scales are much higher than government’s. A cleaner with Air Malta, for example gets Lm5,500 per year while one working for government gets Lm3,700,” he said.

Air Malta drivers get Lm5,900 while a government one receives Lm4,000. A clerk at Air Malta earns Lm6,000 while a civil service clerk earns Lm4,400. “So you see, you must make the distinction there,” said Dr Gatt.

Flexibility was needed for the whole exercise to succeed, he said. “If we do not change our work practices and we are not flexible, we don’t have a cat in hell’s chance of succeeding. We also need greater productivity.”

Air Malta, he said, had also pledged to cut Lm3.7 million in expenditure at top management level.

“Like I said, government is showing goodwill by injecting Lm30 million in capital.” But, warned Dr Gatt in a stern tone, this was not to be taken as a sign of weakness on the part of government. “Everyone needs to do their bit. There needs to be goodwill on all sides. And of course, sacrifices have to be made.”

In a parting shot, Dr Gatt said that while Opposition deputy leader Charles Mangion had said in parliament that he agreed with the measures proposed to save Air Malta, MLP media were putting political spin on everything.

“I cannot understand how the Deputy Leader says one thing and then Super One and other Opposition MPs say the complete opposite,” he said, half-jokingly.

“I reiterate that Air Malta is a commercial venture that competes in a fierce market. If things keep going as they are, the company will fold. But if we all do our bit, there is no reason for things not to pick up,” said the minister in conclusion.