INIA remains cheapest airport in region “by half”: Transport Minister

GMR will lower fuel charges by US$0.05 a litre on all domestic flights and raise it the same amount for international flights at Male’s Ibrahim Nasir International Airport (INIA).

Several airlines, including Qatar Airways and Sri Lankan Airlines, have meanwhile voiced concerns over the recent hike in set airport fees including landing and ground handling charges.

In response, the Transport Ministry has said that even with price changes INIA remains the cheapest airport in the region “by 60 to 80 percent” – and claims that some airlines have not been paying their dues.

“Doha, Dubai, Tivandrum – while they all charge US$3,000 turn-around fees, Maldives’ INIA was only charging US$1,080,” Transport Minister Adhil Saleem told Minivan News. “Even with a fifty percent increase in fees the total charge of US$1,500 is still half of what is being charged everywhere else in the region.”

Saleem noted that INIA’s rates had not changed since 1994, however in that time salaries had increased four times and development projects had been contracted. He added that the price changes – initiated by Maldives Airlines Companies Limited (MACL) and not GMR – should not have come as a surprise.

“In February 2011 MACL informed all airlines that the rates would increase in November, effectively giving them nine months’ notice. There has been no price change by GMR,” he said.

Yet several carriers including Qatar Airways and Sri Lankan Airlines have expressed concerns over the price changes and suggested they would make changes to their routes, reducing services to the Maldives.

Qatar CEO Akbar Al Bakr last week told Reuters News Agency that the airline was “dismayed” over what it understood to be GMR’s plan to increase the handling fee by 51 percent at some future date, and suggested such a move would “threaten Qatar Airways’ continued presence in the Maldives.”

GMR officials are reportedly meeting with CEOs of airlines serving the Maldives. Two airlines contacted by Minivan News did not wish to comment, including Qatar.

“The issue,” Saleem told Minivan News, “is that some airlines have not paid their dues to GMR in nine months. No airport can go on without payment.”

INIA CEO Andrew Harrison later clarified through GMR’s spokesperson that Qatar has an outstanding debt due to its refusal to pay the higher rates. Minivan News understands that GMR has requested Qatar pay cash for today’s flights, while other airlines are in the process of settling their payments with the airport.

Some have suggested that concerns raised by groups such as Qatar also stem from a drop in demand as the low season approaches. Saleem said that Sri Lankan’s strategy had always been to boost tourism numbers in its own turf.

“We believe the London flights were operated for Sri Lanka to achieve its tourism target. They’ve changed their summer schedule to this effect,” he said, explaining that the airline may cut down on direct flights to Maldives as a result, but that this was rather a matter of scheduling.

Responding to  concern that reductions in carrier services would damage the tourism industry, Saleem pointed out that airline changes are a reflection of the already-changing tourism demographic.

Last year Chinese arrivals trumped all other tourist groups to the Maldives, while the Maldives’ traditional European market continued to slump under the West’s ongoing economic pressures.

“It’s a changing world,” Saleem said, noting that local airline Mega Maldives has expressed interest in expanding east to Japan. “The numbers from the East are rising, so it’s possible that the major Western carriers don’t have the demand to continue the same flight frequency that they did before. Singapore will be doubling its flights by 50 percent to 14 flights a week in March,” he said.

GMR spokesman Amir Ali reinforced that concerns over the price hike are misinformed. “There are concerns, but some people are using it in a political game,” he said.

Late in 2011 GMR’s intention to implement a US$25 (Rf385.5) Airport Development Charge (ADC) was blocked by the Civil Court, while minority opposition Dhivehi Quamee Party (DQP) campaigned against the industrial giant with a booklet titled “Handing the Airport to GMR: The Beginning of Slavery.” The government has since appealed the court’s decision, stating that it is obliged to honor its contractual relationship with GMR.

Maldives Association of Tourism Industry (MATI) Secretary General ‘Sim’ Mohamed Ibrahim agrees that INIA’s rates have been remarkably cheap for the region, but believes that the price hike – and ensuing negotiations with airlines – are a delicate business.

Although GMR “inherited” the current change in prices from MACL, “GMR’s strategy is to make as much money as possible any way they can – that’s business. But if it’s not done right then it’s not going to work. This has been too much, too fast,” Sim claimed.

According to Sim, the two overarching issues are the pace and method of the price hike. Rather than raising set fees dramatically during the high season, Sim suggests introducing the change in phases. He also recommends requesting payment post-service.

“In Singapore people are charged after they’ve seen the development and its benefits. People want to see what they are paying for, and it seems to be working alright,” he observed.

Pointing to the Maldives’ limited economy, Sim said airport development and fees “have to be weighed with the reality that the Maldives is totally dependent on tourism.”

Minister Saleem offered assurances that the Maldives’ appeal would continue to draw customers. “I’m sure there will be other airlines wanting to come in, especially as the demographic shifts,” he said.


8 thoughts on “INIA remains cheapest airport in region “by half”: Transport Minister”

  1. I don't consider Saleem to be an intellectual heavy weight; he's nowhere near that. He got certain facts right in what he's saying here.

    Yes, the demographics of visitors to the Maldives is changing. But, he'll be foolish to think that the model that served the Western European traveller will satisfy the Eastern visitors. In other words, continuing to "rest on your laurels" will be a fool hardy act and something that the likes of Saleem will soon regret.

    If you look at the Chinese market, they are almost always "one time" visitors. They come to here to see what the fuss is all about and don't bother coming back. Sure enough, there are a lot of middle class Chinese, but Maldives built its tourism industry on an entirely different "luxury" model catering to Western tastes.

    With the surge in tourism in Sri Lanka, Maldives does face significant challenges. It may face the long but painful road to oblivion. The world of full examples of those who were "great once upon a time". Heed those!

  2. Saleem has no clue as to what he is talking about. The turnaround fee is not universal to all types of aircrafts so I do not understand how on Earth he came up with one figure? Different types of aircrafts based on their size would have different figures.

    As for other airlines wanting to come to Male if the middle eastern airlines pull out, is he an imbecile?
    The fuel in the middle east is the cheapest and if they find it expensive for their operations, how can other airlines find it cheap to operate?

    The only thing he was right was that it was MACL who increased the salaries of the staff and it was increased too much to the top executives.

    GMR is a company and it is understandable that their intent is to maximize profits at the expense of the passengers and of course Maldives.

  3. I wonder why the transport minister has to defend GMR? Because of his actions, I there is something fishy about the relationship of GMR and the current government of Maldives.

  4. When you have customers you have Airlines which are happy to cater. If one go another will come that is the norm in this world. What we see is a stinking political game played by airline agents.

  5. Zeena, This is not the case when you deal with International Airlines. These are not airline agents that are making statements.

    This is the most prominent CEO in the whole Airline Industry, Mr. Akbar al Baker. When he speaks the whole Aviation World listens.
    Then you have the bilateral agreements and rights etc. Each airline could have certain number of flights or certain number of seats operating to a certain country etc. Then it could be also flight schedules etc. Which means airlines has to have a lead time of one year to sort their flights schedules.
    So just because one airline pulls out it is not automatic that another airline would simply take over and start operating the next day.
    It is a lot more complicated than that.

  6. Qatar Airways CEO Akbar Al Baker might be a prominent figure, but he is a contoversial figure. He often comes out with fire in his press conferences, and that's what he did regarding the charges at INIA.

    Why didn't Akbar Al Baker negotiate with GMR instead of threatening the stopping of flights? He probably thinks that will gain him an upper hand in negotiations.

    Why were his aircraft using the INIA facilities without payment? Afterall, we're talking about one of the richest Gulf States vs a tiny bankrupt 3rd world country, i.e. the Maldives, that's being held hostage to vast sums of money.


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