Qatar Airways CEO “dismayed” over airport fee hike, GMR denies plans

Qatar Airways CEO Akbar Al Baker has warned that the airline will re-consider flying to the Maldives if airport operator GMR maintains its apparent plan to raise airport handling fees at Ibrahim Nasir International Airport (INIA) by 51 percent.

Reuters reported that the airline was “‘dismayed’” over what it understood to be GMR’s plan to increase the handling fee at some future date, and suggested such a move would “threaten Quatar Airways’ continued presence in the Maldives.”

Noting that the Maldives’ economy is based on tourism, Akbar Al Baker called the planned increase “totally unreasonable.”

“If we or any other major player withdraws services because of these unwarranted and draconian measures, it will be the people of the Maldives who will lose out, affecting their livelihoods as they rely heavily on the tourism industry,” he said in a statement released on Wednesday.

“My message to the Maldives authorities is to think rationally about the future prosperity of your tourism industry. These steps may have not been thought through seriously by the airport operator and I urge them to think again.”

GMR spokesman Amir Ali said that the fee hike had already been made by the Maldives Airport Company Ltd (MACL) shortly before GMR assumed control of the airport, adding that while there were no plans for a further increase at present, prices were dependent on factors such as fuel prices.

“I believe the fee was increased because of the rise in fuel prices, but I’m not sure since the decision was made by MACL some time ago,” Ali said.

GMR had received no official communication from Qatar Airways, he added.

Since taking over INIA in 2010 GMR has made several adjustments to airport operations in an effort to match the airport’s facilities to those expected by visitors to the country’s upmarket resorts. While progress has been rapid, the local population has also voiced discontent with changes to baggage handling services and departure fees.

GMR was recently challenged in court over its recent attempt to collect an Airport Development Charge (ADC) beginning in 2012, a stipulation which was included in its concession agreement with the government. While the Maldives Civil Court ruled against the ADC in December, the government appealed the case to the High Court, declaring that it was obliged to honor its agreement with the airport developer.


16 thoughts on “Qatar Airways CEO “dismayed” over airport fee hike, GMR denies plans”

  1. Thank you very much mr. president for bringing bunch of leeches to our country. They will suck every last dollar out of our economy. I personally don't care about the current mess. However, GMR blunder cannot be forgiven. If we have another election and you contest, my vote is not with you.

  2. Its not only Qatar Airways. Sri Lankan Airlines has announced that they will cease all direct flights operated by UL from Male to Europe and Japan. Think about that!

    Sri Lankan also is planning to reduce capacity of flights they will operate between Sri Lanka and Maldives to reduce cost.

    Singapore Airlines, Emirates and other airlines have expressed grave concern about the sudden drastic increase in various charges levied by GMR. What steps that they will take are yet to be announced.

    All this at a time, when the European market for the Maldives is already in decline. Its only thanks to the Chinese market that the Maldivian tourism industry is surviving. The Maldives cannot depend on Chinese market alone and survive.

    In the meantime, additional taxes, pension schemes, mandatory provident fund for even Bangladeshi workers serving contracts in the Maldives are being forced on the tourism industry and other businesses.

    Occupancy in resorts are in decline. Rates are in decline. Costs up and up!
    Inflation zooming upwards. more islands being awarded for development but where is the money?

    GMR is deducting the dues to the government because the courts have ruled that their 'development fee' is illegal. GMR is 'printing' money from the airport and squeezing everyone who uses the airport.

    What is more, everything on Hulhule seems to belong to them! Not just the airport. They have taken the Airport Hotel, Inflight Catering Center etc. and even kicked out Maldivians providing cargo clearing service.

    So, while the 'idea' of awarding a concessional agreement to GMR to manage the airport was 'good in principle' scant regard for the details of the contract by those who were involved in this deal has led to the country having to face unimaginable problems and loss because of GMR.

    At least, the airlines used to operate and bring tourists till now even if the airport maybe in need of development.

    But the way things are going there will be no flights to land at this envisaged new modern and beautiful airport.

    I have said then, and I will say again - This GMR deal is going to haunt President Nasheed for ever.

  3. Qatar airway is under tremendous pressure to quit Maldives route because of competition from Emirates, who has been here for a much longer period. If FLY Dubai start their flights into Maldives, Qatar airways must work harder to compete in this sector. If our Island Airways can allow Emirates to fly directly from Europe to Male under some code sharing or JVC, it would be next to impossible for Qatar airways to compete. With British Airways now taking London to Male business, Sri Lankan is hurting. The first they would do is to protest any increase in expenses. This is very normal in this industry.

  4. Ilyas. I think you must understand that Europe is broke. Japan is under severe recession. The only places where you can find tourists are China and India until the economies of EU Japan and US improves. The decline in tourist arrivals has nothing to do with GMR. We have enough airlines to cater into our market. SQ and EK can increase frequencies at very short notice. The charter market will move elsewhere to China from Europe. We can invite Air Asia and Fly Dubai as well. Prior to GMR, Hulhule airport consist of 67% of all public debt of the country. We have to get very expensive equipments with high maintenance cost to keep the airport open under ICAO rules. The bidding was done under the auspicious of UN and it was free and fair.

  5. I reckon we should all be realistic and in making our comments. I wonder whether they any of them had really looked into the landing and handling charges at INIA. When were they really revised and was it done by GMR. To my knowledge MACL maintained the same landing and handling charges for over a period of 14 years without any increments and they revised it around mid 2010 under the previous management with prior note and within a reasonable time frame with consideration of the tourism industry. It was implemented and accepted by the aviation sector and there were no issues. However there was another revision announced after the Concession Agreement but by the new Board under the Chairmanship of Bandhu Ibrahim Saleem and with the advise of the FCO, Mr. Shafeeq. Mr. Shafeeq had many reasons to proceed with that and the main being to reflect it on the present government, DRP and Jumhooree would be familiar with his practices. It certainly was very political. It is believed that the former Chairman did not allow Mr. Shafeeq to carry out business as he desired but with the change in the Board Structure he took every advantage he could with Mr. Saleem.

    Qatar and other such airlines have been taking advantage of the situation of the Maldives and realizing that the Maldives economy is based on tourism had take advantage to the fullest. It is a disgrace to these airlines and to the countries too. We should stand up to our rights. Check it out with MACL, some of the middle eastern airlines have got away without paying huge dues, and have been written off.

    One should compare the landing and handling changes at other international airports in the region before making judgement. The comments you make for political gains does have an impact on the national image. It appears that for some the Nation does not matter when it concerns their own gains or political gains.

    The fuel pricing may be high at INIA, it could be reduced. There is no doubt that GMR could address that and sort it out.

    We should not put the blame on GMR, they had made a bid and won, it should be honored and the credibility of the country should be maintained.

  6. The war I forecasted in my open letter to the President already started. Shame, shame, sheme on that deal that will cost the Maldives much more than the price of a new airport. SHAME, SHAME, SHAME. Biting the hand that feeds you is never a good policy neither selling the country to India.

  7. There was nothing fare about that airport deal. The price you will pay is still to be discovered.

  8. Raamiza,

    Tell your comment-writers from the MDP that the word they're looking for is auspices.

    Also the IFC which oversaw the tender process for Male International is a member of the World Bank Group. The UN does not oversee financial transactions.

    Europe is going through a rough patch but it is hardly broke. Look at the tourism arrival statistics. Destinations in Europe still remain as single-biggest contributors although China topped the list by sheer numbers. China's contribution in terms of foreign exchange is however less in comparison to high spenders from Europe.

    No one is opposing an initiative to promote tourism in India and China yet we do not have to sacrifice another source market to do that.

  9. @Raamiza on Fri, 3rd Feb 2012 12:18 AM

    "The bidding was done under the auspicious of UN and it was free and fair."

    Incorrect! The bidding was overseen by an arm of The World Bank which has no affiliation to the United Nations. It was created at the Bretton Woods Conference in 1944 where the major powers of the day were the United States and Britain.

    I think Ibrahim Luthufy has got it somewhat right. There's only so much air traffic that can compete into Maldives from Europe and the Middle East. Airlines around the world are facing tough times due to the economic woes in Europe. The larger airlines will be the ones that can weather this storm and smaller players will try to cut down routes in order to save costs.

    It does explain any jitters from Sri Lankan or Qatar airways. Reduced European visitors makes the operation of these airlines more and more expensive. Although we are seeing increasing number of Chinese visitors, we have to remember that they are not repeat visitors. They are mainly turning up to see what the fuss is all about and don't bother coming back.

    Maldives needs to innovate in the area of tourism to keep up with changing market dynamics and shifts in global economic power. We are too slow at the moment and I hope someone realises the danger before its too late.


    "The carrier stated that moves by the Maldives airport operator to increase fees will lead to "higher passenger fares, greater operational costs" besides "seriously questioning" Qatar Airways' continued presence in the Maldives.

    The carrier also said it carries hundreds of thousands of holidaymakers from around the world to the Indian Ocean islands, helping to significantly support the local tourism industry and the country's economy."

    So, whether the price hike was done before GMR took over or not, an unreasonable price hike will remain unreasonable. A price hike of over 51 percent is unjustifiable whether it is based on fuel costs or not. Jet fuel costs have not gone up anywhere near there to put that as an excuse.

    Jet fuel may cost more now than it did when Yaamin was running a black market oil dealing operation out of Singapore! The Maldivian government has to bear responsibility for any airline taking these measures due to handling charges at the airport. Afterall, both GMR and the government will lose huge sums of money as a result of reduced tourist arrivals and flight reductions.

    Qatar Airways is a hugely successful airline and its parent company is not short of cash. So a warning like this needs to be heeded!


    Now, that's what I'd call an impressive airport, with a terminal buidling which is 52 metres at its highest point.

    I didn't see GMR in the list of bidders for the construction of this airport!

  12. A 51% margin is ridiculous.

    This is one country where ground handling fees are exorbidantly high and a further increase is asking for too much isnt it? I am sure there is scope for low cost carriers to enter this market but there is no special rates for such operators unlike other countries.

    Airlines like qatar, emirates are oil rich companies who really can afford to capitalize their netwok but at what cost? If they cease operations, its a shame for the maldives as its a 5 star airline. If they do decide to continue services, am sure along with the other airlines we will see a price hike in air fares!! And who will be paying for it?? Its the passengers or the company they work for.

  13. GMR to Maldives: Another disastrous mess done by Anni to this country. I wish all international airlines, one by one stop operating to Maldives. Then the people would know what kind of s tupid wine drinking idiot Anni is.

  14. @Yasir on Fri, 3rd Feb 2012 5:52 PM

    "GMR to Maldives: Another disastrous mess done by Anni to this country."

    As always, you seem to have missed the mark due to your clouded vision. The 51% price hike was done before GMR entered the picture by the previous operator of the airport.

    Of course, I know, mere facts aren't terribly useful to people like you!

  15. Does it matter who did it?

    If GMR is to continue with the hike then they are equally culpable.

    If President Qayyoom began constructing all-male bathhouse and Nasheed completed it and cut the ribbon then they are both equally gay.

  16. I totally agree with Ilyas. One has to see the picture in its totality. We are heading towards an unsustainable path. I wish our politicians will take our economy seriously before its too late.


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