Island Aviation owes MVR 1.12 billion to MACL
Shareef emphasised the importance of resolving these outstanding dues to reduce MACL’s financial strain and reliance on external borrowing.
Maldives Airports Company Limited (MACL) informed parliament’s state-owned enterprises sub-committee on Tuesday that Island Aviation Services (IAS) has an outstanding debt of MVR 1.12 billion.
MACL officials were summoned to discuss strategies to improve the company’s financial position and address loans. MACL Managing Director Ibrahim Shareef Mohamed stated that providing credit to government-owned companies poses financial challenges for MACL.
“IAS owes the largest amount among government companies, with MVR 1.12 billion in outstanding dues. Annually, they receive subsidies or discounts amounting to MVR 78 million, but this does not offset the debt,” Shareef told the committee.
He explained that the financial burden forces MACL to secure working capital loans, increasing operational costs. Shareef detailed the breakdown of discounts provided to IAS:
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MVR 38.77 million on fuel
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MVR 12.73 million on domestic ground handling
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MVR 11.39 million on ground power units
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MVR 9.7 million on parking
“Parking is provided free of charge to IAS. If another airline of comparable size operated, we would charge MVR 9.7 million for parking,” Shareef noted.
Additionally, MACL offers reduced rental rates to IAS. For instance, while another airline like Manta Air is charged a standard rate, IAS receives discounted rates, amounting to MVR 5.8 million in rental discounts for 2023.
The total discount provided to IAS in 2023 was MVR 78.39 million, and Shareef indicated this figure would likely exceed MVR 80 million in 2024. These discounts are reflected in domestic flight ticket pricing, he said.
Shareef emphasised the importance of resolving these outstanding dues to reduce MACL’s financial strain and reliance on external borrowing.
