Cabinet to direct Island Aviation to reduce airfares for tourists despite ongoing financial losses

The Cabinet has decided to review and reduce the airfares charged by Island Aviation Services Limited (IASL), the operator of the national airline Maldivian. The decision was taken at the Cabinet meeting held on Sunday. However, the President’s Office did not disclose further details regarding the directive.

There has long been public concern over high transportation costs, and the decision is expected to benefit the tourism sector. However, IASL, the parent company of Maldivian, is already operating at a loss. According to Privatization and Corporatization Board (PCB) data, the company posted a loss of MVR 2.8 million last year, following a loss of MVR 46.36 million the previous year. As a result, the government’s decision is likely to place additional financial pressure on the company.

The decision also comes at a time when tourist arrivals have declined due to the ongoing conflict in the Middle East. On February 28, flights from the region were halted following sudden US attacks on Iran. The Middle Eastern route is used by a large number of tourists travelling to the Maldives. As attacks continued, several tourist flights were delayed or cancelled, and transportation costs rose, further impacting the tourism industry.

According to the latest statistics from the Ministry of Tourism, a total of 1.3 million tourists have visited the Maldives so far this year, a decrease of 4 percent compared to the same period last year.