The government will cover the Rf100 million annual shortfall projected for Island Aviation Services (IAS) from the privatisation of Male International Airport, according to company managing Director Ibrahim ‘Bandu’ Saleem. “We are a government company controlled by government policies.”
“It is not a loss, actually. It is a shortfall of Rf100 million annually. That means we are making profits. We are paying dividends to the Finance Ministry. But we are short of cash for our operations.” The government will provide a monthly instalment of around Rf8 million.
Saleem added that “the turbulence” was caused by delays in opening new resorts set for 2008-2010. “The resorts did not open when we brought aircraft after making contracts based on that. So we are short of cash because we have to settle the aircraft loan. That is not something we can do alone. Our operations will improve when the resorts open,” he said. Projected revenues “vanished in a puff of smoke” when Seenu (Addu) atoll Herathera resort stopped operations in mid 2009. “That shortfall is plugged by other operations.”
“We are increasing fares by Rf50 every six months,” said Saleem. “That is not a secret… but when we consider the reality, Island Aviation is the cheapest on per kilometre basis.”
Fares must increase because the prices of engine spare parts increase by 10 percent annually, and also due to inflation, Saleem explained.