Air Malta keeps salary of top executive under wraps

Air Malta has refused to divulge the package offered to the new chief restructuring officer it has just appointed, fuelling speculation this could be as handsome as that offered to its new chief executive.

The national airline, which is striving for survival and forced to restructure and shed half of its 1,200 workforce, appointed Australian national Ray Hart to lead the restructuring exercise.

Air Malta will start its restructuring in parallel with talks with the European Commission on the basis of a plan submitted to Brussels last week.

A company spokesman said the details of Mr Hart’s package were “commercially sensitive”.

Mr Hart will be working under the direction of chief executive officer Peter Davies and would be responsible for the reorganisation process.

When Mr Davies was appointed earlier this year, the government had also refused to say what he was being paid. However, civil aviation industry sources had revealed he was earning close to €500,000. Later, after the figure was published, the government confirmed that Mr Davies was receiving a handsome but controversial pay package of €448,000, including a €150,000 performance bonus.

Mr Hart had vast experience in business restructuring and implementation, the company said in announcing his appointment, adding he had been involved in several airline projects. He is a chartered accountant by profession.

Air Malta’s four-year restructuring plan was submitted to Brussels last week but both the government and the European Commission are refusing to divulge any details. The plan focuses on keeping the national airline flying following a €52 million loan in state aid.

According to EU rules, if Brussels is not satisfied with the plan it will ask the government to make changes but if ultimately the plan is not given the green light, the company will have to return the €52 million.

One of the most delicate aspects of the plan is the downsizing of staff, with about 600 workers expected to be made redundant.

In the midst of this restructuring exercise, a number of Air Malta officials, including chairman Sonny Portelli, have asked the government not to reappoint them.

Mr Portelli has been replaced by Malta Tourism Authority chairman Louis Farrugia. Other individuals who, sources said, were approached to sit on the board included Finance Minister Tonio Fenech’s head of secretariat Alan Caruana who will hold the post of non-executive director.

A spokesman for the Finance Ministry said the composition of the new board had not yet been concluded and this would be announced in the coming days.