President Ibrahim Mohamed Solih on Wednesday has stated that the operator of the national carrier Island Aviation has been running at a loss prior to COVID-19, and the pandemic has worsened the situation.
President Solih stated as such in response to a question from Dhiyares, as the Privatization and Corporatization Board’s (PCB) report shows that Island Aviation’s finances have deteriorated and that company is incapable of paying current liabilities.
“Island Aviation has been running on losses previously. There have been several financial difficulties due to the COVID-19 pandemic within the past year. The company’s financial situation has not improved”, said the president.
According to Island Aviation’s audit report published by the Auditor General’s Office in 2018, the company made a profit that year. The report read that the firm has MVR 98.7 million in profit after tax deductions.
In 2018, Island Aviation received MVR 2.2 billion in revenue. The firm had a profit of MVR 137 after operational costs. The 2018 audit report shows that MVR 113.9 of the profit was then expended as business tax. MVR 98.7 million was retained as gross profit after all the deductions.
The firm distributed MVR 10 million as dividend in 2017, and MVR 20 million as dividend in 2018. The audit report also shows that 30 percent of gross profit was transferred to the company’s general reserve.
Former Director of Operations Captain Ameen has stated that the Island Aviation finances have worsened due to the change in leadership and appointing inexperienced individuals to executive positions. He noted that the company’s finances had been plummeting prior to COVID-19 in 2019.