Performance bonuses of Air Malta’s top management have been permanently scrapped as a raft of reforms at the Air Malta has been kickstarted by the Executive Chairperson, David Curmi.

The Malta Independent on Sunday is informed that Curmi sent an email to top-level management on Friday informing them that the performance bonuses have been “permanently withdrawn with immediate effect.” The decision was backed by Finance Minister Clyde Caruana, who is politically responsible for Air Malta, sources said.

The value of these bonuses amounts to some €500,000 annually.

Extensive Covid-19 work-from-home policies as well as accumulation of vacation leave by management staff members were also given the chop, this newspaper has learnt.

The changes come on the back of a promise of reforms by the Government at the airline as it battles to survive the Covid-19 crisis.

The Government is currently in discussions with the European Commission to allow state aid to be given to the airline. The struggling airline is looking to get around €290 million in Government assistance. Minister Caruana said last month that Air Malta is experiencing losses of over €170,000 a day just to keep aircraft operations going.

Sources described the ongoing negotiations between the Government and Air Malta representatives and the European Commission as “difficult and uphill.”

It is believed that Caruana will be holding further meetings with the European Commission in the coming week, with Air Malta being top of the agenda.

Interviewed earlier this year on Indepth, Executive Chairman David Curmi had said that the airline could start operating with even fewer employees as it seeks to cut expenses.

Curmi further elaborated that the biggest three expenses are aircraft operations, payroll and fuel. “These areas are the ones we need to concentrate on the most.”

He also confirmed that there will be changes at the company’s top-level management, as already indicated by the Government. “The shareholder has already signalled that the company cannot continue operating with a business-as-usual attitude. There has to be change in the mentality and the culture within the company. I intend to build a strong management team from which the next CEO could emerge,” Curmi had said.

The biggest challenge for Air Malta, he said, is to, “without having expectations of great profits,” become sustainable and depend less on its shareholder – the Government – or on external help, like the European Commission.

He said the airline cannot have unrealistic expectations and must, over the coming years, focus on nearby markets and core destinations.

Curmi had also ruled out any strategic partnerships with foreign airlines for the time being. Long-haul flights are also not on the cards for the time being. “Before heading in that direction, we must do a lot of internal work and strengthen the company,” he had said.