Malé, Maldives - Island Aviation, the company responsible for operating the national carrier, has reported losses for five consecutive quarters, as revealed in a financial report released by the Privatisation and Corporatisation Board (PCB).
The recently released quarterly financial report for the third quarter of 2022 confirms that Island Aviation incurred a net loss of MVR 15.23 million during that period. This loss adds to the company's previous losses of MVR 76.6 million in Q2 FY22 and MVR 47.2 million in Q1 FY22.
The financial woes for Island Aviation began in Q3 FY21 when the company reported a loss of MVR 9.60 million, followed by a loss of MVR 24.7 million in Q4. The sustained decline in profitability raises concerns about the company's long-term viability.
Despite generating revenue of MVR 489 million in the third quarter of 2022, the company's operating expenses exceeded this amount, resulting in a loss of MVR 12.6 million. When all expenses were accounted for, Island Aviation's overall loss for the quarter reached MVR 15.23 million.
Island Aviation, once profitable in 2018 and even paying dividends to the state, has experienced a significant downturn since the change in government and subsequent alterations in the company's operations. These changes have evidently exacerbated the company's financial difficulties.
Industry experts suggest that Island Aviation needs to undertake substantial measures to address its financial challenges. These may include cost-cutting initiatives, operational restructuring, and exploring new revenue streams to achieve a sustainable turnaround.
The continuous losses incurred by Island Aviation not only impact the company's employees and stakeholders but also have broader implications for the Maldivian economy. As the national carrier, Island Aviation plays a crucial role in the country's tourism industry, which heavily relies on air travel to attract visitors.
The Privatisation and Corporatisation Board, along with the government, will be closely monitoring Island Aviation's financial performance and working together to devise strategies for stabilizing the company's operations.