The Mediterranean carrier has appointed aviation veteran Joseph Galea as new Acting CEO. He follows Philip Micallef whose two-year term has come to an end. The new helmsman is facing major challenges.
Air Malta is in the red. It secured its survival only by subsidies totaling €130 million, granted by the Maltese government. A financial concession that provoked the EU competition watchdogs, who
finally agreed to the payment, provided the airline undergoes a stiff restructuring program.
Simultaneously, the Maltese government decided to offer other carriers to buy into Air Malta, under the condition that any future majority shareholder secured its further existence. This initiative sparked Alitalia’s interest, offering the takeover of 49 percent in Air Malta.
These are tough framework conditions the carrier’s new chief Galea is facing, putting the responsibility on his shoulders to find viable solutions.
So his main task will be to negotiate all relevant commercial and operational terms with Alitalia that is eager buying into the airline by securing 49 percent in Air Malta thus indirectly controlling it. However, Alitalia is just a sort of a front man since the financial backer of the deal is the Roman airline’s Arabian shareholder (49%) Etihad Airways.
Diverging traffic interests
While Etihad’s prime aim is to channel as much air traffic as possible via its hub in Abu Dhabi, it is in Air Malta’s interest to secure the transport of European tourists to and from the isle in the Mediterranean Sea which is highly dependent on tourist spending.
It will be interesting to see how Galea can match these diverting approaches finding suitable operational solutions, if at all.
Back to growth
Secondly, it will be similarly difficult to up sales substantially for getting his airline out of the red, the faster the better. What strategic measures Galea intends to convey he left open in his initial comment following his appointment. Instead, he remarked: "It is indeed both an honour and a challenge to take over temporarily the position of CEO. This is a most exciting time that gives Air Malta the chance to consolidate its position as the national airline of the Maltese islands and to have the chance to go for structured growth over the next years."
Outsourcing cargo activities
On the cargo side, Air Malta has handed over all business activities to British sales agent Network Airline Services (NAS) who have become their new Total Cargo Management (TCM) service provider. The TCM concept represents opportunities of generating additional cargo revenues from the maximization of aircraft cargo hold capacities. This solution is expected to generate new business opportunities from various sources whilst the Maltese airline concentrates on its core business of being a passenger carrier.