Gianluca Ferri

Avoiding the Airline Graveyard: New Business Models for Air Malta Gianluca Ferri

In the last decades the airline industry had to deal with problems including: intensified competition from low cost carriers, higher customer expectations, more price-sensitive customers, rising fuel prices, rising airport charges and higher operating costs. Air Malta was not immune from these evils and, since 2001, its operating environment became increasingly complex. In November 2010 Malta notified the European Commission that it was applying for rescue aid for its national flag carrier. This book analyses the negotiations surrounding the restructuring of Air Malta up to the date its rescue package was sent to the European Commission. Using the models developed by Northwestern University, the Wharton School of Business, and Harvard Business School, the author highlights how the parties involved in Air Malta?s restructuring have been engaged in ?shadow bargaining,? awaiting a European Commission ?Green Light? to begin real negotiations. Using examples of other airlines that went through restructurings, the author also illustrates how ?win-win? negotiations are possible for Air Malta, if a different business model is adopted by the parties.