Last updated at 7.08pm with Air Malta statement.

Air Malta wants to lay off 108 of its 134 pilots after no agreement was reached with the union on how to reduce payroll costs in the wake of the COVID-19 outbreak which has left its fleet grounded.

It is similarly planning to lay off 139 cabin crew after no agreement was reached with their union. A further 145 cabin crew who are on a fixed-term contract have

already been notified that their employment will not be extended following the expiry of its current term.

The national carrier outlined its plan in a letter sent on Tuesday to the director-general of industrial and employment relations. Air Malta noted that its operations had dwindled to a mere two flights a day as opposed to a normal daily schedule of around 20.

“The extraordinary amount of cancellations, and therefore reimbursements, together with the obligation to continue servicing fixed costs, such as aircraft lease payments, have led the company to necessitate mitigation of costs, including payroll costs,” the airline said.

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In a statement on Wednesday afternoon is said it had offered the trade unions representing all its employees a minimum floor of the average pay of the last twelve months, capped at €1200, as basic monthly income which would be applicable for all those on indefinite and definite contracts, meaning that all employees, including staff at head office, engineers, cabin crew, and pilots would get a minimum income of €1200 monthly even if they are not required to operate and stay at home.

"This would have also meant that no employee is made redundant and that those employed on a definite contract would also have been retained in employment. The offer also specified that if compensation for actual work performed would (in terms of the applicable collective agreement) result in compensation in excess of €1,200 in a month, they would be remunerated on the basis of the actual amount due in terms of the applicable collective agreement for the work performed."

It was only the engineers' union which accepted the proposal.

"As a result, the company regrettably had to announce to its workforce that a number of employees falling under the collective agreement signed with the Union of Cabin Crew and the Airline Pilots Association (ALPA) will be made redundant due to the current circumstances and the failure to reach agreement with the same unions on cost mitigation measures which could have avoided such redundancies," it added.

The airline said its top management, has already accepted a significant pay cut in their salaries as well as the removal of allowances and perks, despite working to save the airline.

Pilots are insisting their income had already dropped by around 30% due to reduced flying hours. Moreover, they are insisting that they will only consider a further pay cut if management took a similar one.

Informed sources said that as for the selection criteria for redundancies, Air Malta is proposing to follow standard procedure of “last in, first out” and has already produced a list of employees who will be affected.

Redundancy payments will be made in line with the collective agreement and the 30-day notice period started on April 7.

'Airline should be nationalised'

Asked for his reaction, ALPA spokesperson Dominic Azzopardi said he was left “speechless” with the decision.

“Employees are the ones who will be bearing the brunt of the situation by the looks of it,” he said.

While expressing disappointment that they had not received any feedback to their request for a meeting with Economy Minister Silvio Schembri, who is politically responsible for the airline, he called on the government to nationalise the airline.

“At present, this would be allowed as certain state aid restrictions imposed by the EU have been temporarily lifted due to the exceptional situation. This is the direction being taken with regards to Lufthansa and British Airways,” he said.

Azzopardi questioned if the drastic action was also being taken regarding management and contractors providing certain supplies. He added that the airline should revise some of its financial commitments like the leasing of some of its aircraft to mitigate recurrent expenditure.

In a statement later, the union said the burden of the current situation must be borne equally by all employees from the very top to the bottom and it was willing to carry its fair share after meaningful and effective consultation. It said CEO Clifford Chetcuti had lost an opportunity to 'come clean' by telling the workforce about his own salary cuts 'like most other respectable CEOs around the globe have done.'

The union said it wanted to know the airline's plans for the future and questioned how the airline would end up with only enough pilots to fly two aircraft.

'Make the most of state aid flexibility'

The government should make the most of flexibility in the EU’s state aid rules to help Air Malta through the COVID-19 outbreak, Opposition deputy leader Mario de Marco said on Wednesday.

Fielding questions from reporters, de Marco said that in these difficult times for the aviation industry it was important to think about the future of Air Malta.

To this end, de Marco said the government should explore the possibility of bailing the airline out.

He said the top priority was to ensure that pilots did not lose their jobs.

“We will need them once the crisis is over,” he said.