The Maldives’ first private airport opened today in Alif Dhaal atoll Maamigili with Maamigili MP Gasim Ibrahim’s own ‘Flyme’ airline beginning operations from Male.
The first commercial ‘Flyme’ flight left Male this morning with 16 tourists, Gasim, his family, and senior Villa officials on board, Haveeru reports. The airline has two aircraft with a capacity of 46 passengers each.
Maldives Association of Tourism Industries (MATI) is said to have provided support for the airport’s construction. Gasim said the airport includes private jet parking, and there are plans to use more aircraft to service Gaaf Dhaal atoll Kaadehdhoo and Seenu atoll Gan.
CEO of Ibrahim Nasir International Airport, Andrew Harrison, has expressed support for the airline.
Flyme airlines scheduled 10 flights for its opening day, however it did not disclose ticket prices.
Eighteen Maldivian GMR employees will be reinstated as permanent baggage handlers at Ibrahim Nasir International Airport and given seven months back pay in a lump sum, the Employment Tribunal has ruled.
The Tribunal found last week that the employees’ temporary contracts, which were terminated in May, had violated rights and benefits conferred upon employees by the Employment Act.
The ruling states the contracts violated company policy, which identified baggage handling as a permanent position but for which workers were only issued temporary contracts.
“The employees were technically working in a permanent position, although they worked under a temporary contract. The Employment Act article 4[a] states that there shall be no differentiation in salaries of employees working in the same level,” said the Tribunal’s ruling.
The Maldives’ Employment Act does not state that temporary contracts themselves are invalid, as was reported by local media. The Act defines a “temporary employee” as someone “working on a day to day basis with no prospect of being made permanent employees.”
The contracts, which were issued by the airport’s former operator Maldives Airports Company Limited (MACL), were found to violate provisions of the Employment Act.
“The contracts had been issued on a three month basis by [Maldives Airports Company Limited] before GMR took them over,” said a Labor Relations Authority officer. “The Labor Relations Authority found that they did not provide for annual leave or for a Ramazan allowance,” he said.
According to the officer, GMR had been asked to update its temporary contracts in accordance with the Employment Act after employees filed a complaint in January. The contracts were updated as requested, and upon their expiration in May the employees were dismissed and a baggage handling company was hired.
Employment Tribunal Registrar Alia Haneef could not say if GMR’s hiring of a baggage handling company was against any regulation. However, “the previous contracts were invalid,” she said. “Section 13 states that employees who have been working under any form of contract for a total of two years or more are entitled to permanent contracts.”
The employees originally asked the tribunal to order GMR to reimburse them the money they would have received as permanent employees, however the report states that the tribunal was unable to rule on cases older than three months.
The tribunal concluded that GMR was to pay the value of seven months’ salaries and allowances within seven days and to consider the terminated employees as permanently contracted employees.
The case was filed at the tribunal on 27 April, although the order to pay back seven months’ worth of salaries and allowances refers to a start date of January 26. The tribunal’s reports claims this adjustment compensates for the first three months of the case on which it is unable to pass ruling, due to time elapsed.
A GMR spokesperson said the company had not been officially informed of the outcome by the Employment Tribunal and was unable to comment on the matter.
Correction: Previously, the article stated that “the Tribunal found that [the contracts] did not provide for annual leave or a Ramazan allowance.”
It should have stated that, “the Labor Relations Authority found that [the contracts] did not provide for annual leave or a Ramazan allowance.”
A new website has been launched for Ibrahim Nasir International Airport, with features such as live flight information and an online booking system to facilitate flight, hotel and resort bookings.
In a statement, airport developer GMR said the new website “hosts innovative ways to boost the entire travel experience for passengers and is designed keeping in mind the customer’s expectations with easy navigation and important information accessibility.”
The site also includes information such as travel tips and things to do in the Maldives for first time passengers, and for airlines, a dedicated section focusing on available services and various charges.
The website also includes a ‘Career Opportunities’ tab “which will help the local population find current openings at the airport,” the developer said.
Airport CEO Andrew Harrison said GMR had “looked at making the website more interactive and informative, keeping in mind the passengers’ needs and preferences. We believe that this technologically advanced yet simple-to-navigate website will make the airport experience better for every traveller”.
Airport architecture and engineering firm ADPI has unveiled new images of the design for Male’ International Airport, which is being developed by Indian infrastructure giant GMR.
The existing terminal is being upgraded before the construction of a new terminal on the opposite side of the island of Hulhule, which the developer has pledged to complete in 2014.
As well as being a visually dramatic structure on the skyline, the new airport will include various sustainability initiatives such as seawater air-conditioning.
Artist's impression of the exterior
Ultimately the development will involve 45,000 square metres of new terminal, repair and expansion of the runway, parking and taxiing space, and a turning point so more flights can be landed in the space of an hour.
The infrastructure giant’s ‘brownfields’ approach – refurbishing an active airport, as opposed to a ‘greenfields’ or ‘from scratch’ project – mirrors that of its much larger airport development in Dehli. The old terminal was upgraded prior to the opening of the new one last week, which is now expected to cater to 90 percent of the airport’s passengers, with capacity of 34 million per annum upgradable to 100 million.
At over US$400 million the project is the largest single foreign investment ever made in the Maldives and has run into political controversy, including persistent allegations from opposition parties that there was corruption in the bidding process, and several referrals to the Anti-Corruption Commission (ACC).
“There has been no formal communication [with the ACC], and we are extremely confident of standing up to any scrutiny because of the way the bid was scrutinised by the World Bank’s International Finance Corporation (IFC),” CEO Andrew Harrison told Minivan News in an interview in March, setting a target for the completion of the refurbishment in October.
The refurbishment is “essentially throw-away” considering it will have less than a three year lifespan until the new terminal is completed in 2014, Harrison told Minivan News at the time, but will include a food court and a raised ceiling in arrivals so tourists can see the sea as they emerge from the gate.
Besides ongoing upgrade work and staff training exercises, recent developments include the signing of a US$140 million contract with the State Trading Organisation (STO) to supply fuel, switching the contract over from Dubai-based Galana Petroleum.
More recently, the government announced that the airport was to be renamed after former President Ibrahim Nasir, who ordered its construction during his rule.
Male International Airport is to change its name to ‘Ibrahim Nasir International Airport’ after the former president.
Minister of Transport Adil Salim told Haveeru that the cabinet had decided to rename the airport as it was founded under Nasir’s leadership.
It is the third name change for the airport’s operator GMR Male International Private Limited which was initially named Hulhule Airport and then Male International Airport will be renamed on Maldives’ Independence Day (July 26), in preparation for the opening of the new wing at the airport.
The Adhaalath Party has issued a statement threatening protests if the government does not terminate all agreements made between Israel and the Maldives, in particular if it allows Israel flights were to operating in the country.
‘’It is very concerning that the government is strengthening relations with such a cruel state,’’ the Adhaalath Party said in the statement. ‘’The government intends to allow Israel national carrier [El Al] to commence operating in the Maldives by December this year.’’
Adhaalath claimed that “more than 12,000 innocent Muslims are held hostage in Israel.”
In April this year the Adhaalath Party said the party had decided to terminate the coalition agreement with the ruling Maldiivan Democratic Parrty (MDP) should the government permit an Israeli airline to operate in the Maldives.
However, today Transport and Communications Minister Adil Saleem confirmed to local media that Israel flights would commence operating in the Maldives on December 13.
Adil told the media that 433 Israeli tourists visited the Maldives in 2004, 758 in 2005, 569 in 2006, 838 in 2007, 1307 in 2008, 1588 in 2009 and 1380 in 2010.
He also said that more than 500 Maldivians had so far visited Israel this year, noting that many Maldivian had visited the country to see Masjid-Al-Aqsa.
Currently Maldivians visiting Israel had to spend a lot of money on air tickets, he said.
GMR Male International Airport (GMIAL) today sought to clarify the payment of the airport service charges, fuel re-export royalty and concession fees to the government, following reports in newspaper Haveeru that it was undergoing a tax audit due to “inconsistencies”.
Commissioner General of Taxation Yazeed Mohamed was reported in Haveeru as saying that the Maldives Inland Revenue Authority (MIRA) was conducting an audit of the payments as “we looked into the speculations and found that there are some issues with the amounts paid.”
Yesterday, Haveeru reported the Managing Director of the Maldives Airports Company Limited (MACL) Mohamed Ibrahim as saying that the concession fee GMR had paid was US$2.6 million less than predicted.
“The payment was made in the first week of this month. We have informed the company that the amount does not match our estimations. The Finance Ministry has also informed the company that the actual amount would be more than that,” Ibrahim was reported as saying.
GMIAL issued a statement today claiming that concession fees up until March 31 had been paid “in full and complete compliance with the concession agreement.”
“MACL had certain observations to which GMIAL responded on April 11. MACL has not approached GMIAL with any further comments on the issue,” the statement read.
GMIAL further claimed the airport service charge was collected from airlines on behalf of the government until March 31 and paid to the MIRA on April 24, while the fuel re-export royalty was paid to MIRA on April 24 “as per the terms of the fuel re-export agreement.”
“GMIAL has not received any official communication from MIRA, other than acknowledgement of receipt, in relation to the above,” the statement concluded.
Speaking to Minivan News today, MIRA’s Director of Assessment and Audit Aiman Ibrahim said that the audit was “routine, as conducted for all tax types” and that the only inconsistency was that the airport service charge payment “was lower than our forecast.”
“Our forecast for the first three months, based on arrival and departures and factored into our 2011 budget, was that the airport service charge revenue would be US$4 million. The payment for November 25 to March 31 was US$3.9 million, so either there has been an underpayment or our forecasts were optimistic,” Ibrahim said.
The confusion was complicated, he said, “by an administration failure on behalf of the government. The Ministry of Finance was not aware it was supposed to be receiving the money. There is also conflict in the concession agreement: the agreement itself states that the [airport service charge] is to be paid monthly, but an annex in the agreement says payments are to be made on a quarterly basis. GMR had been keeping the money in a separate bank account.”
MIRA had not formally notified GMIAL that it was being audited, he said, as it was a routine audit and no notification was required unless further documentation from GMIAL was required.
GMR had met with MIRA today, Rasheed added, “and were very cooperative. They were concerned about the negative publicity.”
Indian infrastructure giant GMR, in consortium with Malaysia Airports Holdings Berhad (MAHB), last year won a bid to develop and manage Male’ International Airport under a 25 year concession agreement which includes a spend of almost US$400 million on a new terminal.
Under the agreement the consortium paid the government US$78 million upfront, and will pay one percent of its profits and 15 percent of fuel trade revenue until 2014. From 2015 it will pay the government 10 percent of airport profits and 27 percent of the fuel trade until 2035.
The agreement has been a major point of contention with the political opposition in the Maldives, which opposed it on nationalistic grounds.
Rising prices for aviation fuel and increased ground handling charges made by GMR, the Indian infrastructure giant that is now managing and developing Male’ International Airport, are in line with international prices, the airport’s CEO Andrew Harrison has told Minivan News.
The price of fuel at the airport has increased 35.39 percent at the airport and 35.67 percent internationally, Harrison said, in an update on progress at the airport during an initial 180 day strategy period following the company taking the reins.
“We are not even passing over the full increase in prices of fuel – we’re sensitive to airline customers and what the price of fuel means to them,” Harrison said. “The escalating price is affecting the whole global economy, and affects airlines directly not just here but at all other locations.”
Harrison sought to head off concerns aired recently that the cost of fuel at Male’ International Airport was impacting airlines’ willingness to fly to the destination.
“No airline has come forward and said they are unhappy with our pricing, but they are concerned about the global price of fuel,” he said. “With all the volatility there are challenges there.”
“We are working on some strategies to reduce the cost of providing fuel to them. We’ve spent the last six weeks meeting airlines – some want credit terms, others a set supply criteria – we are trying to meet the need of the majority.”
“The pricing of fuel is not something we compare one place to another, because there are many variables including the method of delivery and the volume you’re buying. The size of the berth we have limits the size of vessel we can charter, and these factors affect the price we can buy and supply fuel at.”
GMR had signed a US$140 million contract with the State Trading Organisation (STO) to supply fuel, he added, switching the contract over from Dubai-based Galana Petroleum.
“Our sense was it was better to use a company right here with us that would share in the risk and opportunity and try to get us the best possible price – for instance, the STO has its own vessel, and may not need to charter one. They made an extremely competitive bid.”
Many airlines, he explained, used a middleman reseller who bought fuel and sold it by offering components such as credit terms.
“Resellers may be in a better position to do that, as we are not a company in the business of providing credit terms to airlines. But what we are saying is that because the airline is our direct customer we prefer a direct relationship with them.”
This had led, Harrison said, “to a number of airlines leaving intermediaries and coming to us directly. They have a choice – but they are coming to us.”
Ground handling spikes
GMR has significantly increased ground-handling charges to bring the price in line with other international airports, Harrison said.
The ground-handling charge for a B777, used by many airlines flying to Male’, was recently raised from US$1990 to US$2985 ( at daytime) and US$3585 ( at night) – an increase of over 50 percent.
“It’s not necessarily unreasonable or overpriced – it may seem like a jump but there’s been no increase in 12 years, and we are still more competitive than a number of international markets,” he claimed, noting that the comparable cost in an Australian airport was US$4286 and US$4388 in Europe.
Most other services, such as the provision of ground power, were either cheaper than comparable rates in India or included – airports such as Hyderbad charge airlines for services such as the provision of wheelchairs, or use of a scissor-lift for people unable to climb the stairs to the plane.
Free storage of airline baggage containers had actually resulted in the airport being inundated, “but instead of charging we are asking airlines to reduce them to realistic levels.”
Ground-handling charges were less that four percent of an airline’s operating cost, he noted, “but that doesn’t mean we want the issue to escalate.”
Corruption allegations
Despite persistent allegations from opposition parties that there was corruption in the airport bidding process, including several cases forwarded to the Anti-Corruption Commission which vowed to investigate, “we have not been approached by the ACC,” Harrison said.
“There has been no formal communication [with the ACC], and we are extremely confident of standing up to any scrutiny because of the way the bid was scrutinised by the World Bank’s International Finance Corporation (IFC).
“They been here recently as part of their due-diligence process, meeting members of the public, ministers and stakeholders, and holding a community meeting in Hulhumale’ about the impact of the development. They wouldn’t be here doing that if they felt they were part of something that had not been done properly. We are confident that irrespective of what is being discussed in the media that we followed a legal and due process that was transparent and respected.”
There were, he acknowledged, “people who believe in what we doing, people who feel they haven’t seen sufficient evidence of what we’re doing, and people who will never be convinced no matter what we do.”
Cultural construction
The first 180 days, Harrison explained, had been spent merging the cultures of the three organisations now operated under GMR Male’ International Airport – the former Maldives Airport Company Limited (MACL), Island Aviation’s passenger check-in and passenger handing operation, MIC’s interior cleaning, “as well as GMR’s culture.”
The company’s organisational structure had been unveiled with an emphasis on staff training, involvement in decision making and addressing issues such as a noticeable gender imbalance.
“We found a gender imbalance in the workplace – there were not many ladies operating at levels where they had significant levels of responsibility,” Harrison observed. “So we tried to address this – the new Head of IT Operations is a very qualified lady who is very good at her job, but she was many levels below and wasn’t being allowed to operate at a level that matched her potential.”
GMR was making an effort to communicate in both Dhivehi and English, he said, launching Dhivehi language classes for non-Maldivians and producing documents in both languages.
Staff suggestions and involvement had led to the creation of a non-punitive safety system, encouraging reporting rather than punishment, upgrade of the airport’s sea rescue capabilities and the replacement of 350 unbranded assembled computers with a consistent Dell IT infrastructure – and paid software licences.
Glitches in communication emerged as well – GMR took a dim view at the beginning of March when security staff began conducting pat down searches of every passenger trying to enter the terminal.
“A pat-down check is more efficient when people are experienced, but not when you introduce it on a peak morning with queues all the way down to the seaplane check in area, with no notification to the airlines or us,” Harrison said. “As a result of that we had unprecedented delays – nearly every flight that morning was delayed. Security took a line that nothing new was introduced, but after an emergency meeting the pat downs were stopped and the queues disappeared.”
He was, he said, happy to look at industry best practice and whatever technology was required, “but [I] am not prepared to introduce something not in line with international standards. Heathrow and Gatwick search 25 percent of those who don’t set off the alarm. Here we were searching 100 percent.”
CEO Andrew Harrison (left) at the airport handover
Physical infrastructure
Harrison was very conscious of public expectations regarding the airport upgrade – following the release of artist impressions of the airport, GMR has kept a low profile while introducing its organisational structure and attempting to win over staff to its nearly US$400 million vision for the airport.
Managing such expectations had been one of the key challenges, he said: “A lot of people felt there would be changes to the terminal the day we took over – but there have been many considerations, such as impact of work in peak periods, and understanding what work we want to do.”
Many physical improvements were scheduled to begin as the Maldives leaves peak travel season: “We weren’t in a position to remove even a single baggage carousel,” Harrison said.
GMR has a lot of work ahead of it if it plans to meet its target of upgrading the existing terminal by October. The refurbishment is “essentially throw-away” considering it will have less than a three year lifespan until the new terminal is completed in 2014.
During a tour of the present airport terminal Harrison provided a running commentary of planned improvements – including a food court (selling, among other foodstuffs, Turkish kebabs – a Male’ first) and raising the ceiling of the arrivals area so tourists could see the sea from the gate.
Harrison admitted that the scale of investment in the upgrade made it tempting to just bring forward the date of the new terminal, however he acknowledged the local appetite to see quick improvements.
“People will see changes in the coming months. For example, we’re about to start work on the domestic terminal, increasing the space available by 50 percent. This falls outside the concession agreement, which mostly concerns international travellers – but a lot of domestic passengers are Maldivian and deserve to benefit from the improvements as well.”
Other improvements will include redesigned and standardised tourist counters that are branded individually by resorts, a left luggage service, baggage wrapping service (“this is popular for a number of destinations, especially Eastern Europe”), porter service (“people particularly from the Middle East want the services of paid porters”), ‘fast-track’ immigration and customs as well as the potential for a ‘premium’ jetty.
There will also soon be a spa in the departure area offering 20 minute shoulder and foot massages, and possibly a nap and shower facility. Moreover, ‘soft skills’ trainers loaned from Singapore Airlines, “some of the best in the world”, had been invited to help train front-of-house staff at the airport.
Following construction of the new terminal, Harrison said the goal was to turn Male’ into one of the top five airports in the 1-5 million passenger category (the airport presently sees 2.4 million visitors through its gates a year).
“Look at the kind of experience a tourist coming to the Maldives goes through,” he said. “The natural beauty of the resort environment, and then the airport experience they go through at the end – it’s not right, standing in extensive queues, with a level of service so far apart from that of the resorts.”
Economy and marketing
Asked whether GMR had concerns about operating in the Maldives given the state of the country’s economy, Harrison said he believed the improved airport itself was part of the solution.
“An airport is an economic engine for a country,” he explained, “allowing trade, travel – both passenger and cargo – and employment. If the processes are made efficient, it has positive impact on the economy.”
Moreover, GMR’s involvement provided resources and expertise in opening up new tourism markets for the Maldives, Harrison explained, particularly undeveloped markets such as the United States.
“We want to talk to resorts, the Ministry of Tourism and the airlines about possibly marketing the Maldives in the US,” Harrison said.
“The US is the most underrepresented market in terms of direct tourism, however 14 percent – the highest single percentage – of tourists arriving coming into Delhi hold US passports. If they are willing to fly to India it’s only a short hop to the Maldives – I think it’s a matter of awareness and understanding connectivity and flight options, and most importantly, what’s here at end of the journey.”
The Maldives, he said, represented a “more interesting prospect” than traditional nearby island destinations visited by US tourists, such as the Bahamas and the Caribbean, adding that GMR was keen to explore this untapped market.
“We didn’t go to ITB [the recent travel industry trade show held in Berlin] this year because we didn’t think we had anything to say and I didn’t really want it to just be a jolly,” Harrison said. “But next year we’ll have a stand showcasing what we are doing here.”
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