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

Together with Louis Farrugia as new Chairman, government appoints Alan Caruana, Alec Mizzi and Roderick Chalmers as new directors to the board at Air Malta.

21 May 2011, 12:00am
by Karl Stagno-Navarra

3 min read

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.

More from Karl Stagno-Navarra

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Dan huwa d-destin tal-Maltin bhalissa. Hawn nofs tuzzana biss tajbin Maltin. Il-bqija kollha ghar-rimi. Sitwazzjoni ta' musical chairs biss. . Ghalhekk il-pajjiz sejjer tajjeb: gvern imdejjen sa ruh ommu, familji ma jlahqu ma xejn, 40,000 ificcu xoghol dicenti u permanenti, pagi ghar minn dawk ta' cheap labour, ecc

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one of the errors that one can go forth with is adopting the so called LCC model. that model worked fine for the last 10 years ( even though their existance is much more than that) but again LCC are changing there model and adopting to new criterias. Our national Carrier has to be more than proactive in this regard and follow a combination of LC and Legacy Carrier. the so called Hybrid model is more appropriate,whilst not forgetting that our carrier is a second choice of means of travel to the main product that is Malta itself. I always compare Malta and Airmalta abroad , like a supermarket. one goes shopping for the main needs but next to the cashier one is tempted to take that extra bar of choclate or packet of sweets. now, how attractive and well presented that last item is portrayed among other brands, can be relatively decisive. So yes LC carriers have been branded so and do offer good prices. But it doesnt stop there. I believe we do have a valid product, only, we have to exploit more and provide that extra service to be winners and let customers feel " yes I did make a bargain deal " feeling.

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Flying high after my brother's appointment to the board.

Monica Borg •

@fehmawvuci True enough any restrucuring brings with it social hardships and it is therefore the role of the newly appointed Board of Directors and Government (as the shareholder of Airmalta) to ensure that this process has minimal impact on the quality of life of these employees and their families, possibly with these employees that may end up being redundant, being provided with suitable job alternatives. Within a wider context, as the evolution of the economy continues to take place, it is inevitable that the demand for jobs with legacy sectors will continue to diminish. In this process, the retraining of personnel is necessitated as this will ensure that the emerging new sectors are provided with the necessary supply of workers. Back to Airmalta.. I think we pride ourselves in having had a national airline whichha surely siugnificantly controibuted to our economy. The presence of a national airline is not an option but a must. Consequently, as we become increasingly globlised as an economy we must ensure this is run in a professional and commercially viable way to satisfy all its stakeholders, us Maltese taxpayers included.

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With all due respects to all appointees, I can't see a Brewer; a minister's secretary; a business man specialising in real estate; and a Banker to do much for an ailing airline. Let's just hope that none of these guys have personal interests in side-line businesses which have contributed to Air Malta's downturns. They're all busy bodies in their widespread business activities; except (presumably) the minister's secretary, who must have been added on to add 'ears' to Air Malta's Board new face. At such a critical time, we don't only need to have the best people on board, but people who have to allocate their full time to this national cause. Air Malta has for long been suffering from a political cancer of the 'sanguesughi' strain. Let's give it another try - only this time failure is not an option. We can't afford to have a fully expatriate Board for our national airline - drawn from the several successful operating low-cost airlines, consequently we will have to settle for a group of what the Minister himself classified as pertaining to the local strain of 'Cwiec' ('Idiots' for the foreign 'Cwiec' who can't read and understand Maltese). At the rate of resignations that have been going on, either the Most Honourable Minister is right in his assumption, or there is something really wrong. Golden hand-shakes and perhaps threats seem to hold all at bay with secrecy dominating everywhere (except in the case of the Ghajnsielem nun). I hope the latest acquisition of an Australian Chief Restructuring Officer will make up for any shortcomings by the new Board of Directors. Apart from his luggage, Mr Ray Hart seems to have various other assets: Experience; proximity to Mr Peter Davies (CEO); probably a good package to keep him happily active nibbling at Air Malta's unnecessary costs and improving cash profitability; cutting unaffordable perks to the load of 'preferred' suckers; re-nogotiating 'blue-eyed' contracts; reversing outsourcing where Air Malta proved competent at deliverying. Let's hope Mr Hart will do his work 'Hartily' and not prove to be yet another mercenary. His major asset may be what may be termed as a Kangaroo instinct to travel in long, high leaps over hurdles. Coming all the way from Australia (Wikileaks Country) he may come with a fresh spirit of doing things above board, irrespective of whose 'kallu' he steps on. He will have to leap high to succeed in overcoming the cob-webs of barbed wire set up to protect private territories that seem to have sprung up draining Air Malta to the situation it is in. MALTA NEEDS AIR MALTA - SO PLEASE, PLEASE SEE THAT EVERYONE GIVES HIS DAMNDEST NOT TO FAIL. JOBS AND MINISTERS MAY GO AND COME, HOWEVER, OUR TOURISM AND TENS OF THOUSANDS OF JOBS THAT DEPEND ON THIS SECTOR MUST BE PROTECTED. AIR MALTA IS A PRIME SAFEGUARD FOR MALTA'S PRIME INDUSTRY. GOOD LUCK.

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Time will tell whether the newly appointed board will proove its worth!!!! @wise owl Such wisdom is rarely comforting to the 600 families that are becoming redundant from AIR MALTA or the tax payers that need to keep contributing their hard earned money in order to keep these select few loosers milking the Maltese cow.

Monica Borg •

Some of these comments are truly crap. Clearly Airmalta has been milked by both Governments and I am not surprised that some six hundred workers, some of which let's face it have been employed through divine political involvement, over these last forty years will need to be made in some form or shape redundant. Can one explain to me how an airline with a dozen aeroplanes needs 1500 personnel. The resourcing is truly a joke and a burden on national coffers...well what's new... we all remember the shipbuilding don't we!!! I am equally surprised at the attack of low cost airlines......what an insular mindset!!!!!...have'nt some of you realised that the world is one competitive oyster and we cannot remain in isolation. Low cost airlines are bringing in thousands of tourists with the economy indirectly benefiting from these arrivals. Clearly, Airmalta needs to shake off its legacy strategy and management which needs to be overhauled. Time will tell whether the newly appointed board will proove its worth!!!!

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Another cunning plan. PM Gonzi allows more vultures on the board to get their pick when KM will be declared bankrupt in a few months time. Very much doubt that the present KM will be flying the coming winter schedule. The next step is to force the unions into action and then blame them for the failure of the recovery plan. GonziPN, issa verament nezza l-pajjiz gharwien...ahna l-Maltin sirna poplu llupjat u bla sinsla lanqas temmen li missirjietna rebhu l-Assedju, qamu kontra l-francizi, u bnew Malta hielsa. Shame on us

Brandon Johnson •

Musical chairs insomma, dejjem l-istess hamsa min-nies ta' gewwa igawdu ma' Tonio. Tghid kellmitu Santa Liena u qaltlu biex ilahhaq lil dawn? Jew inkella ghax dawn m'humiex cwiex Maltin? Forsi hawn xi hadd bravu jtina risposta??

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FI FTIT KLIEM ! DIN PUDINA BIL HOBS MALTI W ZBIB BARRANI. MIN KELLU JOBSOR LILL MALTI SAR JOQGHOD GHALL KOLLOX TAHT GVERN FAXXISTA LI ZARMA LILL PAJJIZ U KULL ENTITA MALTIJA LI KIENU IHALLU MILJUNI TAL LIRI FIL BORZA TA' MALTA, LI KIENU JGHAMLU TAJJEB GHAS SAHHA,GHALL EDUKAZZJONI W KULL MA KELLA BZONN DIN L'IZOLA. FI ZMIEN 25 SENA, IL BORZA INTLIET BID DEJN U L-POPLU SAR SKAJV TA' DAN IL GVERN U L-BAZZUZZLI TIEGHU. FEJN HUMA IL GURNALISTI LI MHUMIEX MITHLA TA DAN IL GVERN FAXXIST, JEW IL UNIONS LI KIENU JHADDNU TWEMMIN GHALL GID TAL HADDIEMA. FEJN MARRET IL KURAGG TAL POPLU BIEX MA JIBQAX IHALLI MIN IKOMPLI IKISSER LILL DAN IL PAJJIZ. AHSEB U IRRIFFLETTI X'QIEGHED ISIR GO DAN IL PAJJIZ.

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Why is the union representing AirMalta so silent about these issues. It needs to wake up and take a stand. If something bad happens to AirMalta people should be out in the streets protesting as is happening in other EU countries. The persons who mismanaged airmalta must be brought to court and justiced for their misdeeds! Accounts need to be made public and the public needs to know what and who brought AirMalta to this current unsustainable state!

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Still perfect silence from the workers and their representative...this is a true case of learned helplessness or what??

Albert Mallia •

Aren't there other capable Maltese persons on this island who have nothing to do with anybody?

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MORE jobs for gonzi's a--e lickers. Then they tell us that Airmalta needs to SHED workers! Where the hell is Peter Davies? I though HE was supposed to be running the show.

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Qieghed nara xi haga stramba f'dawn il-hatriet! Iva issa ndunajt, dawn kollha nazzjonalisti ippatentajti u bi-tessera. Stramba hux, din l-ewwel darba li GonziPN hatar nazzjonalisti fuq xi bord (sic!). Mhux is-soltu li ssir dan, mela gejja l-elezzjoni?????

Paul Sammut •

Now would it so happen by a very remote remote chance that Farsons were interested to get a share in a privatised Air Malta back in the 90's? If so, they are now managing to put their foot in the door. One wonders whom they will reward.

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Hawn xihad li jahseb li issa li Louis Farrugia lahaq chairman tal AirMalta, dan il gvern sejjer jaghlaqlu il boreholes tal ilma li Farsons tellaw b'xejn w jbehhulna bil gholi fil mineral waters, soft drinks w il-birra???? Tahsbu hemm xi cans?? What's good for the very big goose is never good for the small gander.

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LOOK AT THE MENTALITY OF THIS COUNTRY ESPECIALLY GONZIPN. 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. BY IT'S OWN ADMISSION THIS TURKEY WAS THE MAIN CULPRIT FOR LOW COST AIRLINES AND THE START OF AIRMALTA'S DESTRUCTION, SO THE BLESSED ONE FENECH APPOINTS HIM EXECUTIVE DIRECTOR TO FINISH THE JOB. 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. THIS DUDE WOULD BE INVESTIGATED IN ANY OTHER COUNTRY AND POSSIBLY CONVICTED FOR HIS MANIPULATION OF THE PROPERTY FUND, YET ONCE AGAIN TONIO UNDER IMMACULATE INSPIRATION HAS APPOINTED HIM A BOARD MEMBER. WHERE ARE THE UNIONS & THE MALTESE PEOPLE WHO NEED THIS AIRLINE MORE THAN THEY NEED MENTAL CASE FENECH.

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AS ALREADY PREDICTED IN MY PREVIOUS POST. I HAVE LEFT 4 OUT OF 8 TENTICLES FREE. THESE ARE NOW MADE AVAILABLE TO THE REST OF THE BOARD MEMBERS!! QUO VADIS AIRMALTA...............MINN DAK LI FADAL INSOMMA!!

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What is the common denominator in this new board? As always they are all blue-eyed boys!

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The truth is that the PN and friends have milked Air Malta dry. Many people know of the various shaddy dealings, corruption, and mis management perpetrated by PN stalwarts. So the PN cannot and will not solve the problems because they cannot wage a war against their own friends and party fund raisers. The workforce needs to keep the airline alive and vote for a change so that a new broom sweeps clean and the airline can be the pride of Malta.

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Dan mhux xi cuc Malti tafux. Tonio jaf x'qed jaghmel. The boy is only securing 4 out of 8 tenticles to move around and secure a good hold of what AirMalta will become. We only need to wait and see. As for Sonny Portelli? He will still remain in the good books of Gonzipn.......old friends, very old friends!!

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At least we have a leading industrialist, appointed as chairman. (according to this article). Good luck. He will need it

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@david_lexicon Workers would be fools to strike now. They would proide the excuse to declare the Airline bankrupt and sell off to a hand full of business men to the detriment of this country with all workers loosing their jobs and some re-engaged with new conditions and wages. One wonders why the outgoing Chairman did not seek reappointment at this very crucial stage. Time will tell. Meanwhile speculations are rife that the Airline will be sold off, especially if the EU does not agree with the rescue plan.

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The workers have to strike now. Anyway, the airline is heading to total destruction. At least the workers can cause some headaches to Minister Effettivament Cuc Malti. Good luck to all workers.

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Ghalhekk qed jaqbzu ghal tal-liquigas.Dan m`ghandux 50% fil-liquigas

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ara ser jilhaq cuc malti tafux?

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Tahwid u aktar tahwid; tigiega taghmel aktar sens min GonziPN bhalissa. Jekk ghad baqa xi hadd li jahseb li mexjin il-quddiem flok induru bhal zugraga, haqqu idendel boxla ma ghaonqu. Time over for GonziPN and alas for us! Il-pozi u aktar pozi qatt ma weldu xi haga ta nies. NB bil-haqq kont imsiefer GonzipN issellef bix jibni bieb il-Belt? Tal-genn, ver tal-genn!

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Meta se jsemmu lehinhom il-haddiema? Appointments l'hawn u appointments l'hemm...x'esperjenza ghandu Farrugia fl-avjazzjoni??? Qed jghaddu minn fuq il-haddiema, il-Unions u l-PL bhar-romblu fuq it-tapit!!!

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Tiskanta kif decizjonijiet strategici dwar assi mportanti bhall-Air Malta qed jittiehdu minn zewg persuni li aktar ma jghaddi z-zmien aktar qed juru kemm huma ta' livell medjokru. Qed nirreferi ghal Dr Lawrence Gonzi u Tonio Fenech. F'hiex wasal dan il-pajjiz! Povra Air Malta!

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The new guy on the block will be paid a few hundred thousands as well and do what everybody knows how to do. Slash costs , make people redundant and show how good he is. But that is not the only way to go. There are other avenues that should be studied. Like removing all the perks that all past and present politicians keep milking from the airline and all those who have ever worked with the airline and create a level playing field with the likes of Ryan air. If the Airline has four extra planes then why not create a new low budget airline like Ryan air with those four planes and compete and get all the perks the competition is getting as a subsidiary of Air Malta from the EU and from MIA. It is intrinsically wrong for the EU to close down the airline on the grounds of mathematics. I do not care what other Airlines have been through but one Airline that has withstood it all is Alitalia. And there is no better way to tell Europe to shove it then to fight the tooth and nail. And one thing is for sure. The PN cannot blame it on anyone , not even Bin Laden. They have destroyed one of the jewels of the nation. And rest assured there are the wolves ready to pounce on it once it has been reduced to a skeleton free from employees and obligations and then we will be told that a certain Magnate ( And I dare say Maltese this time for there are setups ready to do it) is trying to save it. Time will tell.........................................

Igor P. Shuvalov •

Naraw isibux xi 'cuc' tal-qalba issa!!!!

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If Air Malta ground its operations you too Mr Fenech should ground all of your operations and join the priesthood, there you might have more credible visions then the ones you had so far in your useless ministry.

Ian George Walker •

Of course he won't be reappointed - he's a Ċuċ Malti., isn't he?