Maldivian, on Monday, revealed the company, after just one time in 2019, has not been provided the subsidy required for the purpose of decreasing the prices of domestic fares.
Decreasing the prices of domestic travel is one of President Ibrahim Mohamed Solih’s first 100-day pledges. In order to fulfill the pledge, Maldivian, in 2019, decreased its fares for domestic travel.
Senior officials of Maldivian were summoned to the Parliament’s Committee on State-Owned Enterprises on Monday over the hike in Maldivian’s domestic fares.
Speaking at the convening of the committee – Maldivian’s Managing Director Mohamed Mihad underscored the government’s issuance of MVR 35 million in subsidies for the company in 2019. However, he stressed no funds have been issued to the company after that one time. Therewith, he detailed that the company’s operations are entirely dependent on its revenue.
He further attributed the expensive domestic fares to the increase in operational costs due to the increase in the number of airports. On this note, he pointed four additional airports had been brought into operation within the past four years.
Although there are two other domestic airlines in the Maldives, Mihad stressed they do not operate to these airports as a result of which Maldivian is forced to bear these operations.
“We have to operate three flights per week on an average to these locations even if we do not receive the load. We are starting with two flights per week to Faresmaathoda Airport to which we recently began operations,” he elaborated.
Mihad said the inauguration of new airports also entails recruiting additional employees including pilots and engineers. In this trajectory, he detailed that technical staff are recruited on high salaries – marking another reason for the increase in its operational costs.
“An addition of five new airports prompts operations to these airports. The increase in operating costs for these airport forces us to alter the prices of fares,” he said.
Speaking further, Mihad said that maintenance organizations repairing and maintaining aircraft engines are facing major backlogs following the COVID-19 pandemic.
“As a result, there are delays in repairing engines of aircrafts we use for our domestic operations prompting us to rent engines as well,” he added.
He also said that prices of spare parts and maintenance for Maldivian’s aircrafts have been doubled as the world economy remains weighted down by the rise in inflation.