Air Transport World

Remaking Air Malta: turnaround hopes hinge on structural revamp, company culture change.(Profile)

With losses of close to $58 million over the past two years--including an estimated $32 million in the fiscal year ended last July 31--Air Malta cannot continue to operate with a business-as-usual attitude. That is the message coming out of the executive office, where CEO Ernst Funk, a Swiss transplant who took over in fall 2002, and Air Malta Group Chairman Lawrence Zammit are shaking things up at this formerly sleepy Mediterranean carrier.

With 41 years at Swissair behind him, Funk knows what it means for an airline to fail. "We have to introduce fundamental changes in the way the company functions," he told shareholders after he joined Air Malta in mid-October 2002, more than a month after actually being named to the position. Echoes Zammit, who arrived 17 months ago, "We must place the customer at the center of each and every decision ... We have to change the culture where each department exists as an individual entity, independent of the rest of the organization."

Steps taken so far include streamlining the executive leadership ranks from a 24-person group to a six-member team of "chief officers," along with a three-year wage freeze for staff plus improved work practices and other elements. Savings are projected at $4.3 million and the aim is to trim operational and administrative costs by a further $10. …

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