Air Southwest MD goes South ?
Air Malta’s new CEO’s package raises hackles
by Noel Grima
Predictably, the revelation by The Times that Peter Davies, the man chosen to be Air Malta’s new CEO, will get a €500,000 package set the blogs afire yesterday.
There were few who said that such a job requires such a remuneration, but most of the people commenting said Mr Davies’ package would have saved the salary of some 300 Air Malta workers who are due to be laid off.
Some said they could not believe there are no Maltese who could have done the job for a lesser package, while others objected that a foreign CEO would not be subject to political pressures.
Many commented wryly that this is no ‘ċuċ Malti’, as the minister has been famously reported to have said he did not want, while others commented on other blogs that the situation at Air Malta resembles very much what happened at Malta Dockyard when two top experts were brought in, only for what is known as the Fairmount disaster to take place and lead to the demise of the shipyard.
Among the many Peter Davies on the internet search engines (including an author, a footballer and the right-wing mayor of Doncaster), one finds that this Peter Davies was appointed as Air Southwest managing director in the UK in January 2009. Previously, Mr Davies had been chief executive of Belgian national carrier SN Brussels Airlines and after that chief executive of Caribbean Airlines in the West Indies.
Mr Davies’ 27 years’ experience also includes senior posts with DHL Express Systems.
According to Airline Business, five weeks after taking the post, Mr Davies was already stirring things up in the south-west of England.
Little-known UK regional airline Air Southwest operates a fleet of five Bombardier Dash 8 Q300s on routes mainly within the UK from Newquay and Plymouth.
After five weeks and what Mr Davies describes as “my usual airline diagnostic”, which resulted in a seven-page report for the private owners of the airline on the best business and strategic options for the carrier, the first fruits of his labours included: the announcement of a new route between Plymouth (with an extra hop to Newquay) to London City Airport.
This route was the first to London City for Air Southwest. It flew the route twice daily, allowing virtually a full business day in London, giving the train a run for its money.
Air Southwest also continued operating its four-times-daily service to London Gatwick.
However, according to Wikipedia, the flights started on 20 April, but the service failed to attract enough passengers and ceased in May 2010.
In May 2009 the airline underwent a re-brand to broaden its target audience and increase its market presence. A new slogan of “Fly Britain’s Local Airline” was adopted and supported by a television commercial on regional channels, a revamped website and a nation-wide advertising campaign.
Another improvement to the services offered came into effect on 31 May 2009, when the airline adopted the IATA code SZ. This has created a number of opportunities for future development, such as the introduction of interline agreements/codeshare with other airlines and the possibility of using third parties such as travel agents for ticket sales.
However, the airline announced the suspension of services from Newquay and Plymouth to London Gatwick from 1 February 2011.
As chief executive of SN Brussels Airlines, the Belgian national airline, Mr Davies was responsible for the turnaround following the bankruptcy of Sabena Airlines.
Prior to that, he was chief operating officer, DHL Express, USA, where he was responsible for over 10,000 people and realised a significant turnaround in profitability and increased sales margins from 4% to 12%. Before that, he was regional director, DHL Europe, where he established DHL as the leader in express delivery across emerging markets in Central, Southern and Eastern Europe.
In 2006 Mr Davies accepted the appointment of chief executive of BWIA West Indies Airways, which closed later that year. A new regional airline, Caribbean Airlines, of which he was chief executive, commenced operations in January 2007.
Both SN Brussels Airlines and BWIA West Indies Airways entailed extensive re-organisation, change and transformation. They had been state-owned industries. Sabena went bust and SN Brussels was the phoenix. Sabena had made a profit only twice in its 70-year history, whereas SN Brussels Airlines made a profit immediately and is still going strong.
Likewise, BWIA West Indies Airways made a profit only twice in its 66-year history. Mr Davies recommended to the Trinidadian government that it close it and launch a new airline, Caribbean Airlines.
After only a few months, there was a discernible difference to the punctuality and financial performance of the airline.