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Page added on February 11, 2014

Air Asia ex: low-cost carrier suspends Maldives operations due to “challenging” conditions

Air Asia ex: low-cost carrier suspends Maldives operations due to “challenging” conditions thumbnail

Air Asia X has announced it will be suspending all operations to and from the Maldives from March 1, citing “challenging business conditions” both in the country and in the wider region.

“Despite our efforts, external factors such as the depreciation of Asian currencies against the US dollar and the chronic lack of hotel room supply in Maldives resulted in cancellation of thousands of bookings by travel operators,” said Azran Osman-Rani, CEO of AirAsia X – the low-cost carrier of the AirAsia Group.

“As part of our strategy to operate more efficiently, the airline will deploy our aircraft to routes with the right level of demand to be financially viable.”

“We have been very grateful for the huge support rendered by Male Airport, Maldives Tourism and relevant authorities and would like to put on record our appreciation for all the cooperation that has been given to us,” concluded Azran.

Today’s decision comes just months after the brand expanded its services to the Maldives, with regular flights between Kuala Lumpur and Malé via Colombo announced last September. The airline has said that the Sri Lankan service will continue.

Air Asia has subsequently written to all of its customers offering the re-routing or refunding of pre-booked flights that will be affected.

The Maldives tourism industry currently contributes around 30 percent of the country’s GDP, with visitors to county passing the one million mark in 2013 – growing by 17 percent compared with the previous year.

Neither the Tourism Minister Ahmed Adeeb, the President of the Maldives Association of Travel Agents and Tour Operators Mohamed Khaleel, nor the Secretary General of the Maldives Association of Tourism Industries Ahmed Nazeer were answering calls at the time of press.

The most recent government figures – from July last year – show the operational bed capacity of the industry to have been just under 24,000 in the first seven months of the year, with an occupancy rate of 80 percent.

The Maldivian Rufiyaa currently follows a pegged exchange rate with the US Dollar, with a 20 percent band on either side of a central rate of 12.85 rufiyaa to the dollar. After the managed float was introduced in 2011, the official rate quickly rose to the maximum rate of 15.42 rufiyaa to the dollar where it has remained.

Soon after the Maldivian Monetary Authority (MMA) figures showed the government had printed over MVR1 billion (US$ 64,516,129) in the past year, MMA Governor Dr Fazeel Najeed tendered his resignation.

Before departing last month, Najeeb called upon the state to reduce expenditure and to stop printing rufiyaa, which he argued was exacerbating the country’s perennial dollar shortage.

President Abdulla Yameen’s new government has looked toward the tourism industry for new sources of revenue to finance this year’s budget.

The People’s Majlis last week agreed to hike Tourism Goods and Services Tax (T-GST) from eight to 12 percent in November, approved the immediate reintroduction of the discontinued US$8 bed tax, and will now require resort lease extension payments to be made within two years.

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9 Comments on "Air Asia ex: low-cost carrier suspends Maldives operations due to “challenging” conditions"

  1. Andrew Andreas on Tue, 11th Feb 2014 6:33 PM 

    Adhaalath any words from God about this?

  2. Junaidh on Wed, 12th Feb 2014 12:44 AM 

    Mind your words ‘Andrew Andreas’, why talk about Adhaalath if you can’t respect Allah

  3. Adhaalath on Wed, 12th Feb 2014 5:23 AM 

    @Andrew Andreas no, we haven’t heard from her in 1400 years.

  4. Citizen on Thu, 13th Feb 2014 11:40 AM 

    @ Andrew Andrews,
    Why not ask God about that numbskull of a brain of yours that doesn’t know how to respect your creator.

    If you want to be prove your smartness and lack of belief in God, go ahead and bow to your to Cows, but don’t try to drag other human beings to your level.

  5. minivan baby on Thu, 13th Feb 2014 12:58 PM 

    god took advantage of the cheap fares and went on a trip around the world, but now sadly he cant return since sir asia is going to stop, sniff sniff

  6. Anthony Roberts on Thu, 13th Feb 2014 11:33 PM 

    Dialing 911, uh, hello, god? Maldives need a bail out, and quick!!! Lol!

  7. Anthony Roberts on Thu, 13th Feb 2014 11:35 PM 

    @Minivan baby, wrong! He just realized Thailand is way more fun and stayed there. lol ;-)

  8. Andrew Andreas on Sat, 15th Feb 2014 11:50 AM 

    @Citizen,

    Quite the contrary, I’m not trying to be smart. But I would like Mordisians to make use of their creator-given brains.
    And what Adhaalath preaches now, what the stupid bedouins got bamboozled with, in the dark ages, is definitely not from the creator.
    It’s those who actually associate the Arabian dimwits,( among the most laziest and arrogant humans, ie if they can be classed as such), as the messengers, proxies for creator, who is insulting creator.

  9. Tourism on Wed, 19th Feb 2014 12:51 AM 

    “Neither the Tourism Minister Ahmed Adeeb, the President of the Maldives Association of Travel Agents and Tour Operators Mohamed Khaleel, nor the Secretary General of the Maldives Association of Tourism Industries Ahmed Nazeer were answering calls at the time of press”

    The real story behind this is Tourism Ministry had given wrong Statistic report to Air Asia, All the airlines will study market on that report, Last year one million tourist figure was given by NCIT by Defense minister Nazim order, Immigration as informed to Defense Minister and Even President office that American System cannot generate any report that means any type of reports even for tax’s and Airline day to day report even cannot generate from that system.

    This issue was discussed last week by tourism ministry with Concern Departments,. and it was a real big issue that all airlines getting wrong data from Immigration Department because of Terrorist Tracking system.
    Big issue for all Mira and Ministry of Tourism and even to Airlines from this system.

    if you cant believe ask Tourism Ministry.


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