BrazilAbu Dhabi consultancy firm overseeing Air Malta’s dissolution
Loss-making Maltese flag carrier Air Malta has chosen consulting firm Knighthood Global to aid in its dissolution. The news comes shortly after Malta’s Prime Minister Robert Abela announced that the airline would be rebuilt from the ground up.
The contract between Air Malta and the Abu Dhabi-based consulting firm is said to cost Malta a whopping €200,000 a month (€2.4 million a year). The restructuring will create a new airline, though it will retain the name Air Malta, use the same fleet of aircraft, and reemploy the same personnel.
The Finance Minister of Malta, Clyde Caruana, described the contract with the consultancy as a temporary engagement for financial and strategic advice.
Knighthood Global, founded by the former CEO and CFO of Etihad Aviation Group, James Hogan and James Rigney, specialises in advisory in the aviation and tourism sectors. The two stepped down from their previous positions at Etihad in 2017 after their plans to buy stakes in other airlines crashed and burned.
The contract, according to the Times of Malta, has in its scope a laundry list of advisory services including ensuring discontinuity between the old and new airline, supporting discussions with the European Commission, and creating a five year business plan, among other strategic and financial responsibilities.
The new Air Malta
The new version of Air Malta that will emerge from the dissolution will likely have a reduced scale. As for the approximately €356 million in losses that were accumulated by the flag carrier over the years – tax payers will unfortunately likely have to foot that bill.
Consultants at Air Malta
Knighthood Global is not the only management consulting firm that Air Malta has flown in for advice.
All in all, 12 professional firms and nine individual experts have been contracted on engagements with Air Malta that will terminate between November 2023 and June 2024 – when the new carrier hopes to be completely operational.
Most well-known firm of the advisory line-up is EY, with other players either boutiques or independent experts with a track record in the aviation industry.
In 2021, Air Malta worked with another consultancy with the goal to save the carrier from bankruptcy. This attempt failed and was largely seen as the last straw for Air Malta.
Previous attempts at saving the airline largely hinged on discussions with the European Commission over state aid, which saw Air Malta fail in their plea for a second round of restructuring aid in 2021, after a first round of aid was given to the airline in 2012. The struggling airline has not made profit since before 2010 and between 2005 and 2020, sold off assets worth over €200 million including hotels and its landing rights in Heathrow and London Gatwick airports.
The tango with the European Commission is not yet over for certain, however. If it turns out the fees for the external consultants are to be paid by the Maltese government, it would also require EU permission, because it would qualify as what would be considered as state aid.
In the Middle East, the Knighthood co-founders are not the only Etihad top brass to transition to the consulting world. In 2020, former Etihad CEO Peter Baumgartner moved to a consulting role with PA Consulting as a senior advisor.
