Air Malta spending questioned after operations end

Air Malta PLC, once the flagship state-owned carrier of the Republic of Malta, officially ceased operating its commercial flights in 2024. Yet the company continues to incur substantial costs long after discontinuing its aviation activities. Information reviewed by independent observers indicates that the airline is still paying its company secretary more than €5,000 per month, despite having wound down most of its functions for nearly 20 months. These disclosures have prompted renewed scrutiny of the financial management of the dormant entity and raised questions among senior government stakeholders.

Although the airline no longer conducts commercial operations, the structure of the company has not been fully dissolved. Several roles, consultancy arrangements, and administrative functions have remained in place, even as the airline’s successor, KM Malta Airlines, has taken over national flight operations. This prolonged transitional phase has therefore attracted public interest, particularly due to the continued expenditure of public funds.

To maintain a neutral and balanced perspective, this article sets out the information available while avoiding unverified claims, ensuring a formal and legally cautious analysis.

Background to the airline’s closure

The end of Air Malta’s operational activities

Air Malta PLC concluded its final flights in March 2024 following a lengthy period of financial challenges. The European Commission did not approve a new round of state-funded capital injections, which brought the airline’s long-term sustainability into question. The Maltese government subsequently initiated a plan to close the airline and transition to a new national carrier operating under the name KM Malta Airlines.

Despite ending flight operations, the legal existence of Air Malta PLC remains intact as part of a structured winding-down process. Corporate entities often remain active on paper for a period after ceasing operations, particularly when remaining assets, accounts, or contractual obligations require formal resolution. However, questions have been raised regarding the extent and nature of ongoing costs.

Continued remuneration of the company secretary

Role of Andre Borg

According to the information reviewed, lawyer Andre Borg continues to serve as company secretary of Air Malta and is reportedly receiving more than €5,000 per month in this capacity. Borg has longstanding professional and familial ties to public service roles, including holding diplomatic and government-related appointments.

Borg had previously served full-time as company secretary until March 2024. Although the airline ceased regular operations, he was retained during the wind-down stage. Under Maltese corporate legislation, a company secretary is a required officer for active corporate entities that have not yet been fully dissolved. The position carries administrative and compliance responsibilities, including maintaining statutory records, liaising with regulatory authorities, and supporting the board of directors during dissolution processes.

The rationale for continuing this appointment has not been publicly clarified. Senior government officials have reportedly questioned the ongoing expenses related to this and other consultancy arrangements, though no formal explanation has been issued.

Consultancy spending after operational cessation

Overview of consultancy fees

Since April 2024, Air Malta has reportedly incurred €716,000 in consultancy costs. These consultancies were awarded by direct order, according to the information reviewed.

The breakdown of these expenditures includes:

• €100,000 to Borg & Associates, a legal practice controlled by Andre Borg
• €400,000 to audit firm RSM
• €221,000 to law firm Camilleri Preziosi

Direct orders, while permissible under specific circumstances, typically attract heightened scrutiny due to reduced competitive processes. However, it is not uncommon for companies undergoing restructuring or dissolution to seek specialized professional services, including auditing, legal advice, and corporate compliance.

Questions in Parliament

Opposition MP David Agius sought clarification in Parliament regarding the continued expenditure. Finance Minister Clyde Caruana was asked to explain why these payment obligations persisted after the airline’s operational shutdown at the end of March 2024. According to the information reviewed, the minister declined to provide detailed responses to these specific parliamentary questions.

Given the sensitive and ongoing nature of the government’s restructuring efforts, authorities may choose to withhold detailed commentary until final audits and reports are complete. It is therefore important to note that the absence of a public explanation does not, in itself, indicate misconduct.

Governance structure of the dormant airline

Remaining board members

Even though Air Malta no longer operates flights, the company still maintains a transitional board of directors to oversee administrative functions. While most directors have stepped down, two individuals reportedly remain:

• Philip von Brockdorff, a respected academic
• Michael Grech, a Gozitan financial adviser

The existence of a reduced board is consistent with the requirements of Maltese company law for entities that have not yet completed the process of dissolution. The board is reported to meet infrequently, reflecting the limited scope of ongoing company activity.

The unusual longevity of the wind-down phase

Typically, the dissolution of a state-owned company can take months or years, depending on the complexity of its financial obligations, outstanding liabilities, or legal processes. In Air Malta’s case, the scale of its historical operations means that numerous contractual and administrative matters may still require official handling.

However, sustained operational expenditures—particularly consultancy costs and remuneration—have led some observers to question whether the wind-down timeline could be streamlined.

Additional government-related roles of the company secretary

Other professional engagements

In addition to his role at Air Malta, Andre Borg holds other government or government-adjacent appointments. He is Malta’s non-resident ambassador to Lebanon, a role that carries diplomatic responsibilities. He is also associated with various professional activities in the legal and administrative sectors.

One separate arrangement previously highlighted in public reporting involved Borg’s company Tempodesk Ltd, which receives €6,000 per month from the government sports regulator AIMS for the use of premises in Gudja. This arrangement was also awarded through a direct order. While this agreement is distinct from Air Malta matters, the association has contributed to broader public discussions about procurement practices and transparency across various public bodies.

Questions surrounding staffing levels

Retained staff after the shutdown

Another point that has raised public interest concerns the reported retention of 19 staff members at Air Malta after the cessation of flight operations. Their employment is estimated to cost the company approximately €90,000 per month. According to sources familiar with the company, there is uncertainty regarding the nature of the duties performed by these retained employees during the wind-down period.

It is not unusual for companies undergoing restructuring to retain a skeleton workforce to manage administrative responsibilities, particularly when dealing with legacy contractual obligations, ongoing litigation, historical accounting, or asset disposal. However, the number of retained employees and the associated costs have prompted questions about whether a smaller team or alternative cost-saving measures could have been adopted.

The successor airline: KM Malta Airlines

Establishment of a new national carrier

To ensure continued aviation service to and from Malta, the government founded KM Malta Airlines, which began operations shortly after the dissolution of Air Malta’s flight operations. The new airline operates with a smaller workforce and a revised business plan intended to create a financially sustainable model.

KM Malta Airlines is described as a near-identical successor to Air Malta, though with tighter operational controls and a structure intended to comply with EU regulations regarding state aid.

Pending financial statements

As of the latest information available, KM Malta Airlines has not yet released audited financial statements. Such statements are important for assessing the airline’s adherence to its business plan, evaluating its financial health, and ensuring compliance with EU rules. It is expected that further disclosures will clarify the new airline’s progress.

Public interest and accountability considerations

Why the expenditures matter

Given that Air Malta was a state-owned enterprise, public interest in the financial aspects of its wind-down is understandable. Taxpayer funds were historically used to support the airline’s operations, and continued expenditure on consultancy, staffing, and corporate functions raises the question of fiscal prudence.

The Maltese government has acknowledged the complexity of managing the airline’s closure, but detailed updates regarding the winding-down process have been limited. The absence of detailed public explanations has contributed to ongoing speculation, although it is important to avoid drawing conclusions without complete information.

Transparency obligations for public entities

Public bodies and state-owned enterprises are typically expected to maintain detailed financial records and, in many cases, publish information regarding expenditures. The eventual release of Air Malta’s final audited accounts and closure reports is likely to clarify many of the currently unanswered questions.

Until then, observers remain cautious in offering definitive interpretations of the ongoing costs.

Conclusion

The winding-down of Air Malta PLC continues to generate discussion due to the ongoing expenditure on consultancy services, staff salaries, and remuneration for the company secretary. Although the airline ceased operations in 2024, its legal and administrative existence remains intact, requiring certain corporate functions to continue.

While questions have been raised regarding the scale and duration of these expenditures, no final conclusions can be drawn until the authorities release comprehensive financial and administrative reports. The complex nature of dissolving a national carrier, combined with regulatory obligations and historical financial commitments, means that significant transitional costs may be unavoidable.

At the same time, there is clear public interest in ensuring that the process is handled with transparency, efficiency, and adherence to legal standards. As KM Malta Airlines proceeds with its operations, greater clarity regarding both entities is anticipated through future disclosures.

FAQs

What is Air Malta's current status?
Air Malta PLC has ceased commercial flight operations but remains legally active during a structured winding-down process.

Why is the company secretary still being paid?
A company secretary is required under Maltese law for companies that are not fully dissolved, and administrative duties may still be ongoing.

How much has Air Malta spent on consultancy services since shutting down?
The airline has reportedly spent €716,000 on consultancy work through direct orders.

Who are the main consultancy firms involved?
Consultancy work has involved Borg & Associates, RSM, and Camilleri Preziosi.

Why were direct orders used for these consultancies?
Direct orders may be permitted in specific circumstances, especially during transitional or urgent restructuring phases.

Does Air Malta still have a functioning board?
Yes, a reduced board remains to oversee administrative matters during the company's wind-down.

Why are 19 employees still on the payroll?
Certain administrative or legacy functions may require retained staff, though details of their duties have not been fully clarified.

Is KM Malta Airlines fully operational?
Yes, KM Malta Airlines operates as the national carrier with a smaller workforce and revised business plan.

Have KM Malta Airlines' financial statements been published?
Audited financial statements have not yet been published.

Will more information be disclosed publicly?
Further details are expected once final audits and wind-down reports are completed.