Fenech's secretary, former chairman's son, BOV chairman appointed on Air Malta

Louis Farrugia, the former chief executive of Farsons, will be the next chairman of the national airline after Sonny Portelli informed the finance minister and the Prime Minister he would not ask to be reappointed.

The Air Malta chairman denied having submitted his resignation to finance minister Tonio Fenech, over a disagreement concerning the restructuring plan sent to the European Commission for the national airline.

Sources have told MaltaToday that Fenech’s choice of Air Malta’s future was not consonant with the wishes of Portelli, when it came to choosing which restructuring plan to send to Brussels.

Portelli was in meetings with both Fenech and Prime Minister Lawrence Gonzi on Thursday.

He denied having submitted his resignation with MaltaToday. But government announced the appointment of Louis Farrugia instead,

Louis Farrugia was formerly a chairman of the Malta Tourism Authority.

Meanwile further changes at the helm of Air Malta have raised eyebrows.

Tonio Fenech's head of secretariat Alan Caruana has been appointed as the national Airline's Executive Director, being granted full powers to run the company.

Caruana was known to be the main negotiator with low-cost carriers Ryanair and Easyjet, two companies that have been directly blamed by Ernst & Young as the main contributors to Air Malta's crisis.

Two other new board members at Air Malta are Bank of Valletta Group Chairman Roderick Chalmers and businessman Alec Mizzi.

Roderick Chalmers is reportedly on his way out of Bank of Valletta, and is still under immense flak by both the MFSA and shareholders over his handling of a property fund collapse that cost the bank some €50 million.

Alec Mizzi, son of property magnate Albert Mizzi and former chairman of Air Malta, is a director on a number of businesses.

Air Malta has appointed Ray Hart as Chief Restructuring Officer of the airline. Ray Hart will be working under the direction of Chief Executive Officer, Peter Davies, and will be responsible for the reorganisation process and spearheading change management within Air Malta.

The restructuring process of the national airline will start in parallel with discussions undertaken with the European Commission.

Australian born Ray Hart, who has worked with Peter Davies before, has vast experience in business restructuring and implementation. A chartered accountant by profession he has previously been involved in several airline projects.

Fenech has said that the ball is now in the European Commission’s court with respect to Air Malta’s restructuring plan. The plan will now be subjected to scrutiny by a team of experts in Brussels who may ask for clarifications or even disagree with the contents and ask for changes.

Should the Commission continue to register disagreement, then Air Malta may be forced to dissolve all of its assets and immediately pay back the loan and ground all operations. “Air Malta is not a lone case. Throughout these years we have seen many airlines go through a similar process, and we shouldn’t be over-dramatic,” Fenech said.

The finance minister would not go into the content of the restructuring plan, which so far has been a main bone of contention between the airline and ALPA, the Airline Pilots Association. With a 1,500 workforce and 12 leased aircraft, the plan reportedly suggests the slashing of 600 jobs, prompting concerns from the General Workers Union.