Cost of proposed seaplane operations to local islands “unreasonably high”: Transport Ministry

The Ministry of Transport and Communications has decided to negotiate with seaplane operators Trans Maldivian Airways (TMA) and Maldivian Air Taxi (MAT) to reduce the cost of flights to the atolls, which the ministry believes is “unreasonably high”, reports local media.

The companies submitted a joint proposal in response to the planned Maldivian government initiative to expand seaplane services to the islands to improve the country’s transportation network.

Director General of Regional Airports at the Transport Ministry Saamee Ageel told local media today that the prices quoted by TMA and MAT were “unreasonably high”. The companies proposed being exempt from all aviation surcharges and would charge US$95 (MVR 1,464.90) per trip, per person.

The joint proposal also requested the government compensate the companies if the seaplanes travel with less than 12 passengers on any trip, according to Ageel.

“If that is the case, the government would have to pay about MVR 800,000 (US$51,880.67) per month. These are unreasonably high prices for the government. The government is trying to do this in a sustainable way,” Ageel said.

The Government of Maldives signed an agreement with MAT on September 18, 2012, for the company to provide seaplane services to the islands. Ageel said that agreement has since been terminated.

Currently MAT and TMA make scheduled flights to tourist resorts only.

US-based private equity fund Blackstone bought a controlling stake in both the Maldives’ seaplane operators, Trans Maldivian Airways (TMA) and Maldivian Air Taxi (MAT), in February 2013.

Blackstone, with annual revenue of US$3.119 billion and total assets of US$18.845 billion, bought the seaplane operators for an undisclosed sum.

Senior Managing Director and Chief Investment Officer at Blackstone’s Private Equity unit based in New York, Prakash Melwani, said the investment “will enable us to build a strong partnership with the Maldives.”