The last two weeks have been characterised by a tough standoff between Air Malta and its shareholder, the government of Malta on the one side, and its pilots, represented by ALPA on the other.  At the time of writing, this had culminated in a media claim that the aspired pay rise alone was €50,000 per head a year, on an average wage of around €93,000, which was later denied by the union.

In the following, we will look at some factors as regards the pilots’ work at Air Malta, and at pay scales in view of competition in Europe.

 

Productivity

Air Malta flies planes with 140-170 seats. Other airlines also fly large long-haul planes with 300 to 400 seats; therefore productivity cannot be compared (pilot manpower cost split per seat). 

On the other hand, pilots flying for regional firms on turboprop aircraft with between 20 and 80 seats earn quite a bit less than pilots at Air Malta or other airlines with jets in the 130-210 seat class. Very often regional flying is actually more demanding than that on big airliners. 

It does make a difference if one gets paid sum X for 600 or 800 hours per year.

 

Competition

Air Malta is a leisure-market oriented scheduled carrier feeding from and into networks while competing directly with European ultra-low-cost and charter airlines in the point-to-point field.

In terms of aircraft type, profile of routes flown, and size of company, it would be fairer to compare Air Malta to EU firms like Germania, Small Planet Airlines, and Croatia Airlines rather than to network giants of intercontinental character.

 

Lifestyle advantages

Air Malta crews have a real advantage compared to pilots working with many other carriers (and in fact many other academically-trained employees in all sorts of industries in Europe) of having a very partner/family friendly life: returning home after duty every day, instead of having to duty travel for say five days a week. Also add the job security of a state-owned airline. 

There is no shifting around between bases, making private life, real estate investment and so on very plannable. Most pilots from Europe have to move to some other area in their country in the EU, or even the world. 

 

Malta: high cost of real estate

The cost of houses in Malta is higher than in most EU countries. Take the bases of Germania or Small Planet in Erfurt, Bremen, or Paderborn areas for Germany as an example when looking at the sizes of property. But then there are cities like Munich where prices are much higher, but wages are the same for a Germania pilot based in Munich or Erfurt, not to mention the astronomical real estate prices of the UK.  

 

Training and type-rating

Malta offers Mediterranean quality lifestyle, weather, and compactness. The other places have extremely higher income tax rates, local taxes, charges for things that are all free in Malta, heating, overall much higher mobility costs due to distances and what else, not forgetting job-specific things like type ratings. 

One cannot compare Air Malta to say Emirates or Qantas when Air Malta’s major competition is Ryanair, and the average plane i.e. load of passenger carried is, let us be generous, half or a third of that carried in a widebody A330, B777 or A380. 

Nobody wants Air Malta pilots to have to work under the conditions of European low-cost-at-any-cost or pay2fly airlines, or US regional feeders. 

 

Comparison to pilots in Europe

Pilots at Ryanair Germany start off with an annual pay of €25,000, while captains earn €53,000 after 12 years of service, reaching €85,000 for seasoned crew.

Pay at Etihad’s equity partner Air Berlin ranges between €45,000 and €115,000. Air Berlin also operates almost 400-seat Airbus A330s from, for example Dusseldorf with property prices more comparable to Malta’s (if not more), rather than Ryanair’s countryside airports where a villa costs as much as a Sliema garage. 

On the northern end of Europe, Icelandic flag carrier Icelandair, pilots earn about €75,000 gross income after 15 years of service, starting off with half of that.

At Lufthansa’s subsidiary Austrian Airlines based in Vienna, first officers earn between €50,000 (beginner) and €70,000 after 10 years, while seasoned captains make between €75,000 and €100,000 gross per annum. 

Indeed, Lufthansa captains average €180,000 a year gross including all perks, and at Air France one can earn still rather more than that – but can this set the benchmarks for Air Malta with the aircraft, routes and competitive environment it operates in? 

Actually, Lufthansa is losing a lot of money from its European traffic – the actual profits come from long hauls, and the many other aviation-related subsidiaries forming part of the concern. Air Malta’s business is European leisure route flying versus subsidized ultra-low-cost-airlines.

 

Best view office

Surely there would be qualified people from across Europe ready to work for Air Malta also at less than the average pilot wage at present.  And clearly the respected cockpit job is still a far more desirable job than others, not boring, not nervy, and one that anyone can definitely also wish one’s children to be inspired by and for. 

Air Malta’s present pilot wages are surely not bad in comparison with employees nationally. Ministers or professors might appear poor guys in comparison. As with many other things in our little country that one could see changing over the last say 15 years (a salute to Herbert Ganado), one must be careful that uncontrolled greed does not destroy that what makes (Air) Malta and its people.

 

Uncertainty harming business and asset value

One can only applaud ALPA about its concern regarding the vagueness of the MOU with Alitalia / Etihad for the prospective sale for one euro of the national airline (including its multi-million slot assets). 

At the same time, Air Malta and the Minister for Tourism, representing the Air Malta shareholders (people of Malta) clearly have a point too when claiming that strikes would put the small trouble island into even more dire straits. 

Maltese consumers in Malta and also ethnic Maltese abroad are all informed about the issue and might take their business elsewhere.  Tour operator and code share markets from abroad, from business to business level contact (as most average consumer will not even know Air Malta exists but only learn about it when searching for a flight to the destination themselves or booked by the tour operators) who are uncertain if a route is served, on what days, at what times, or simply doubt if Air Malta will be around till then. Uncertainty does not help sales and generate contracts. 

But these contracts are clearly needed both for the firm as such as well as for hotels, but of course also as regards the asset value of the firm. 

It will clearly make a difference in price if one can sell Air Malta as a going concern with good contracts/commitments already ahead for the next year or as a carrier where these contracts will not materialise, because tour operators who need some planning stability, decide to allocate their seats elsewhere. If Air Malta has to end up privatized I personally would like to see it as a strong carrier with a good future fighting competition and with sound and serious business, and not as a carcass which can be stripped off its slots.

 

Rescued by Joe Public

In comparison to most average earners, including various other academically trained jobs, be it in Malta or abroad, airline pilots remain a well-remunerated group. 

For a small island state airline that has been recapitalized by the Maltese taxpayer with really hefty sums (of several hundred euros per capita – from the poor small baby in Cospicua to the old Gozo nanna on her little pension) because the airline plays a vital role in the country (maintaining safe jobs at Air Malta), clearly big pay rises for a group of employees in the firm that is probably the best paid anyway would be incongruent.  Without the people’s help, the Air Malta jobs would have long gone – and with them many others, especially in tourism, indeed.

One should be careful not to gamble with the public support the firm has.

 

What makes (not only) pilots angry

But indeed, also well-paid senior captains earn very little in comparison to

• people having ‘celebrity’ or ‘heart-throb’ status, or

• people living off the running of betting/gambling set-ups, or

• people setting up letterbox/brass plate firms for others to avoid paying dues elsewhere, or

• people fooling others of their property with the stroke of a pen or

• those buying property at throw away rates and then having them suddenly expropriated and paid millions

• people landing some top paid state jobs from Malta to Brussels and from New York to Shanghai, in somewhat, let us call them, surprising, circumstances

And indeed, with their honest, highly qualified and responsible work, which requires very high academic and physical standards, these things also do not escape the pilots’ attention.  This is however true for many other academically trained jobs as well. Yes, Air Malta’s pilots do have a point in getting angry!

However, unlike the average Joe Citizen, due to the present relevance of Air Malta, the pilots are in a position to leverage a stronger force. But one should appreciate that their jobs are still there only because they were rescued by Joe Citizen, who does not earn €50,000 as an average annual salary, as in most EU countries by the way. 

Reality check: we are speaking about an airline that is not a multi-billion world concern with hundreds of planes, but a small island economy airline on state-aid with leased standard-body planes and zero assets except for its slots and established business network, which operates in such a tough commercial environment that potential investors are not exactly queuing up. 

Air Malta, and thus its staff, has enjoyed support over the years.  One should be careful that this support does not waver at this crucial stage.