National airline Air Malta has engaged an Abu Dhabi-based consultancy firm at a retainer of €200,000 per month, as the government prepares to shut it down and launch a new national airline.
The contract with Knighthood Global was tabled in Parliament on Wednesday in reply to a parliamentary question by Nationalist MP Paula Mifsud Bonnici.
Knighthood Global offers consultancy and business advisory services with a particular focus on the aviation and tourism sectors. It was founded by its chair James Hogan, who previously served as president of the Etihad Aviation Group.
In his reply, Finance Minister Clyde Caruana explained that Knighthood Global was engaged on a temporary contract to provide advice of a financial and strategic nature.
The company is assisting the airline’s management in the implementation of the new business plan of the new airline and was also providing a person with experience in the aviation sector in a temporary role.
The contract, signed in June 2022 and extended in January, expires at the end of 2023. In a separate table listing Air Malta's consultancies, Knighthood Global was listed as having started providing consultancy services on January 1, 2022.
The news comes a week after the government announced that Air Malta is to be succeeded by a new company, KM Malta Airlines plc, next year.
The new national airline will make its maiden flight on March 31 next year, replacing the current flag carrier which will operate its last flight on March 30.
It will, however, fly under the Air Malta name as the brand name is owned by the government.
According to the contract, Knighthood Global has been tasked with:
- ensuring economic discontinuity between the old and new airline
- supporting discussions with the European Commission
- help with the formulation of a five-year business plan
- supporting the development of a network and fleet plan
- review the funding required by the new airline
- developing a communications strategy
- changing work practices to bring them in line with industry standards
- configuring a finance accounting system
The original contract was signed by Knighthood Global executive chairman, James Hogan and Air Malta chairman David Curmi. Extensions were signed by Knighthood’s CEO James Rigney, who was relocated to Malta to work on the project.
Attached files
The decision to shut down Air Malta in favour of a new national airline was made after the European Commission refused to accept a government request for fresh state aid for the carrier.
Times of Malta reported earlier this year that the government was seeking permission to inject some €290 million into the flailing company. But that request was turned down.
The government has said it will be investing €350 million in the new airline, of which €300 million will go towards buying three of its aircraft, which are currently leased, for the purchase of London and Gatwick airport slots from the government, and to buy hangars and surrounding property from Air Malta. The remaining €50 million will be working capital.