The Abu Dhabi-based consultancy company that will be paid €200,000 a month to transition the set-to-close Air Malta to a new carrier was previously and unsuccessfully engaged in restructuring and saving the airline. Meanwhile, their fees raise questions over EU state aid violations.
Air Malta will close for good on 31 March 2024 following multiple attempts to restructure and keep it profitable, including significant cash injections and failed pleas for more European Union state aid.
The government will create a new airline, similar to budget carriers, at a cost of €300 million on top of the hundreds of millions already ploughed into Air Malta over the years.
Finance Minister Clyde Caruana and Chairman of Air Malta David Curmi announced that Knighthood Global Ltd, based in the United Arab Emirates, will facilitate the transition for €200,000 a month. The same consultancy firm was engaged a few years ago to help in Air Malta’s restructuring.
In 2021, Knighthood Global was given some €2.4 million to restructure the airline to save it from bankruptcy. This also failed and was another nail in the coffin of the beleaguered airline.
No information has been given on who is paying the bill for the consultancy. If it is the government, this would require the consent of the European Commission as it would constitute state aid.
Malta was given EU permission to inject restructuring aid in 2012, and an attempt to request more in 2021 was turned down, with the Commission making it clear a second lifeline would not be allowed.
While confirming The Shift’s revelations over a year ago that the government had decided to close Air Malta, Caruana could not explain why he engaged the same firm that failed to deliver success in the past.
“This ‘news’ just confirms that nothing will ever change. These are the same people who gave the wrong advice to Air Malta, leading to its closure. Now, we asked them again to come up with a new plan. It’s simply unbelievable, if not farcical,” a top Air Malta official told The Shift on condition of anonymity.
Who are the ‘new’ consultants?
Knighthood Global is co-owned and managed by James Hogan and James Rigney, the former CEO and CFO of Etihad Airways.
At the end of 2017, Hogan and Rigney were forced to step down from Etihad after the Abu Dhabi state airline registered heavy losses because of its failed acquisition of stakes in Alitalia, Air Berlin and others.
The Abu Dhabi government blamed the two for implementing the wrong expansion strategy, resulting in severe losses.
At this time, Air Malta was also put up for sale, and the government was negotiating with Hogan and Rigney on behalf of Etihad and Alitalia.
They have a long-standing link with Malta through Leslie Cassar, a former agent of Air Malta in Australia who then founded the World Aviation Group and continued doing business with Air Malta in the following years.
Through one of his companies, Centrecom, in which Air Malta has a shareholding, Cassar has a multi-million-euro contract to run Air Malta’s call centre.
Recently, his company was also given another multi-million-euro contract to provide call centre services to the government.
David Curmi, Air Malta’s executive chairman, with a salary of €21,500 a month, represents Air Malta’s shareholding and sits on Centrecom’s board.
Knighthood Global also has a physical presence in Malta and has offices in the same building as Cassar’s World Aviation Group at Mosta Technopark.
The two former Etihad officials are also Malta-registered Knighthood Capital Partners Malta Ltd shareholders.
While at Etihad, Hogan had convinced the Labour administration, led by disgraced former prime minister Joseph Muscat, to sell Air Malta’s majority shareholding to Etihad through Alitalia. But the deal fell through at the eleventh hour, on the watch of then-chairperson Maria Micallef.
Soon after, the Italian government announced the closing of Alitalia.
Better import a new trough- the existing one ain’t big enough.
Mafia xD
James Hogan’s CV:
Ansett Australia : Bankrupt
British Caledonian : Merged with BA
Gulf Air: From largest airline conglomerate in the Gulf to the smallest one / forced to resign in disgrace
Etihad Airways : placed under house arrest in Abu Dhabi for various alleged fund mismanagement / failed Air Seychelles / Air Serbia / Air Berlin / , forced to resign in disgrace
Air Malta : bankrupt and reengaged as a consultant
Somebody is after those lucrative London Heathrow slots ….
Doesn’t it look like shoddy workmanship all around – probably paid at millionaire prices?
It will cost (Air) Malta 2.4 Million Euros for a 12-month contract between January and December this year. Not an irrelevant amount, given the present circumstances.
After March 2024 ‘the future beckons’ (to borrow a well-remembered phrase coined by an economics expert engaged by the Labour Government back in the 1970’s.)
You forgot to mention Darwin Air, later changed to Etihad Regional. Bought 65 SAAB aircraft, employed hundreds of employees who were all fired within a year and orders never delivered. Siphoned enough money from Abu Dhabi to Switzerland to open up his business
so after all, his place is in MAFIAMALTA – bniedem ta’ talent kif kien qal l-akbar pm korrott li qatt kellha Malta.
Il PM korrot ghalek qal bniedem ta Talent ghax gaghbuh hawn biex jghejdilhom kif halli jimlew butom sewwa.
If at first you don’t succeed.. just ramp up the bs and keep on billing. It’s all OPM (other people’s money) anyway, eagerly traded by the OPM, and any other ministry you care to name, for the personal gain of the MLP mobsters.
The biggest mistake that the Labour government made was that it dismissed completely the 2012 restructuring plan. The government is now saying that it needs € 300 million to establish a new airline. We will see eventually that the figure will be much higher..
Excellent journalism.
And how much is the chairman is still being being paid ? ,
Consultants with a great record by the looks of it. Whose the guy who engaged them and negotiated their fee? If it was Konrad Mizzi or Joe Muscat I have no doubt they did their usual homework.
Whoever engaged them before must have been involved in securing their return, and must still be lurking in the background. I see a Vitals Global Healthcare II.
Spot on.
Stop impressing yourselves with British consultants. Etihad learnt its lesson, why can’t you?
There are crooks everywhere , and this government’s policy is to corrupt
I have never worked with these consultants but my initial reaction to this is that the consultant is only half of the equation – the client needs to take on board and implement their recommendation for their advise to be impactful and achieve results. I think we fail miserably on the latter.
I’m still trying to figure out how creating a new airline, with existing leadership, and retaining all staff (who need to reapply for their jobs after being paid out) is going to do something innovative that the existing leadership failed to do these past months. Can someone enlighten me please?
Not only had they failed to help AirMalta, but they are the wrong sort of consultants – they are people who are accustomed to Monopolies and State Aid, whereas within the EU things are very different.
So why were these people chosen? I suppose you can only answer that question if you follow the money.
It never ceases to amaze me Malta’s incompetence at recruiting dubious people, as advisors or persons of trust.
These so called consultants their C.Vs have a variety of cases of let’s call it incompetence.
Yet this government continues to pay millions to these and many others in various important positions within Malta’s administration.
To err is human, to persist is diabolical.
Look at it differently.
It amazes me how they always pick on the crooks to make business with.
Muscat was well trained by Scicluna who was his mentor.
Then came Keith and Hillman with Konrad to do their dirty work.
This is another Hospitals Deal.with €300 million for grabs. So Muscat does the Jurgen Fenech bit asking for his percentage? These consultants fucked up Etihad Airways , then took all his staff at Etihad and created his consultancy with the spoils? The last run on Maltas coffers by the Labour Party.
The consultancy deal with Knighthood Global seems to have similar features to the Vitals Global Healthcare deal .Why is the government so obsessed with employing as consultants persons who have already failed in attempts to save Air Malta in the past? Who is to gain (apart from the consultants) from the waste of public money and the placing of the new Company at great risk fom itsvery start?
I would suggest that part of the deal is that the consultants have a side agreement whereby a significant part of their astronomical monthly fees are recycled for the benefit of those involved in their appointment.
the usual corrupt lot from the muvument korrot (making hay while the sun shines (as michmich suggested or dawk li qed jithanzru – as per rosianne’s statement) and who’s emblem on the muvuments korrott banner has the burning torch which is burning our country.
Mafiamalta – trid tkun korrott u halliel jew habib ta’ xi hadd mill-muvument korrott.
Follow the money
THE LABOUR MAFIA ARE STILL TRYING TO EXTORT MORE FUNDS FROM THE DEAD HORSE. THE NEW AIRLINE WILL PROBABLY GO BANKRUPT BEFORE IT EVEN STARTS!!!💯👎☹️