Former CEO insists that Air Malta restructuring was ‘on track’ under his watch

Former Air Malta chief executive Peter Davies takes issue with comments made by new chairperson Maria Micallef during PBS interview on Dissett

Peter Davies (centre) insisted that Air Malta’s rebranding and new livery played ‘a key role in promoting both the airline and the destination of Malta in a contemporary and dynamic manner.’
Peter Davies (centre) insisted that Air Malta’s rebranding and new livery played ‘a key role in promoting both the airline and the destination of Malta in a contemporary and dynamic manner.’

The former chief executive of Air Malta, Peter Davies, has taken issue with comments made by chairperson Maria Micallef, who on national television stated that the national airline had only met its restructuring plan’s annual targets once, under the Welshman’s helm.

Davies, who spoke to MaltaToday, said that Micallef made “factually inaccurate statements” when she claimed that Air Malta’s restructuring plan was only on target in 2012 when it halved losses to €40 million. “The true picture is well documented by independent audits, carried out as a matter of law, and a further audit which was commissioned by the current government. At the end of my contract, the airline’s restructuring plan was principally on track, subject to some decisions that failed to be taken and were outside of my control.”

Micallef told Dissett presenter Reno Bugeja, the PBS Head of News, that the airline halved losses to €40 million in 2012, but then in the year ending March 2013, its losses were €30 million rather than the €15 million it targeted; and in the year of its expected breakeven, losses will be €16 million in March 2014.

Davies, who was paid a €350,000 salary and a €150,000 performance bonus, also took issue with claims that he did not want to renew his contract beyond the March 2014 expiry date, and that he gave successor Louis Giordimaina no handover.

“From the outset, I was presented with the anomaly of a three-year contract which did not align with the five-year period of the restructuring plan. Notwithstanding, at the end of my contract, I offered to serve in a strategic advisory role to support the CEO and board of directors in implementing the restructuring programme and providing industry insight into the development of a longer-term strategic plan,” Davies said.

He said that although then chairman Ray Fenech “indicated” that an advisory role for Davies would be beneficial to Air Malta, the offer was never made to him.

He added that he briefed Giordimaina many occasions, who as designate-CEO also attended his weekly management meetings.

“I was available up to the end of my contract for consultation on any aspects of the airline’s business. I also worked with the new board – including Ms Micallef – for approximately one year before I left,” Davies said.

“Most importantly of all, there was a capable management team in place across the company – with a blend of local functional expertise and international aviation experience. I repeatedly stressed the importance of effective succession planning to both boards of directors appointed during my time at the airline.”

During her interview on PBS’s Dissett, Micallef said that she disagreed, in hindsight, with Davies’s decision to spend €1.7 million on a rebranding of the airline and €5 million in restructuring costs.

“Brand leadership is a vital element of business strategy and in achieving customer engagement,” Davies responded.

“Although Ms Micallef apparently regrets the work undertaken to renew the airline’s brand, it is clear that Air Malta had become an outdated brand with a tired service proposition.

“The new brand identity has been a powerful factor in the company’s root and branch restructuring, as well as in helping lead the staff from the front to a new culture and a sustainable future.”

Davies insisted that the Air Malta brand – which included a new livery, new uniforms, and a renewed social media marketing image and campaign – “plays a key role in promoting both the airline and the destination of Malta in a contemporary and dynamic manner – across Europe and beyond.”

Davies, who has been involved in several turnarounds for airlines, said that a single, intense period of change is not sufficient. “After restructuring, simple maintenance does not produce adequate results to ensure survival and future success. If the people of Malta want a viable airline to support their economy, the airline should be led by an experienced management team with a plan to grow the airline and not to look backwards.”

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