Early retirement schemes for Air Malta employees are expected to cost the government €92.5 million this year alone.
The staggering costs account for the lion’s share of a €97 million increase in the budget allocated to the Office of the Prime Minister (OPM) for 2023.
According to official budget figures, OPM was originally given €43 million to cover its spending this year.
Its total budget allocation for recurrent spending has now increased to €140 million, more than three times its original planned spending.
Budget documents put this increase spending allocation down to the costs of the Air Malta schemes, increased OPM salary costs and spending for hosting international conferences.
An OPM spokesman said an additional €2 million had been allocated to OPM for international conferences, most notably the MED 9 meeting.
“The actual cost incurred was much less than allocated and this will eventually be reflected in the final estimates,” the spokesman said.
The spokesman said the main cost increases were down to Air Malta schemes, which were transferred from the Finance Ministry to the prime minister’s office.
The reason for this transfer was because RSSL Limited, a state-owned entity, had been tasked with the implementation of these Air Malta schemes, the spokesman said.
RSSL Limited has long been headed by Lawrence Mizzi, the father of ex-tourism minister Konrad Mizzi.
Workers being offered golden handshakes
Mizzi claimed during his tenure as tourism minister that he managed to turn around the beleaguered airline’s finances, and Air Malta would soon be flying to far-flung destinations like New York’s JFK airport.
Finance Minister Clyde Caruana announced last month that Air Malta will instead be shut down, with a new airline set up to take its place.
The newly recapitalised airline will retain Air Malta’s current fleet of eight Airbus A 320 aircraft.
It will fly to 17 destinations, discontinuing unprofitable routes. Air Malta operated to 37 destinations as recently as 2019.
Air Malta over the past two years slimmed down its workforce from just over 1,000, with the offloaded workers being offered generous golden handshakes or absorbed in the public service with the same pay.