Tuesday 16th Apr 2024
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Maldivian

Maldivian National Airline Faces Turbulence with 164 Million Loss

Island Aviation, the company that operates the national airline Maldivian, reported a staggering loss of 164 million last year, according to financial updates released by the Privatization and Corporatization Board (PCB). The loss was spread unevenly throughout the year, with the second quarter bearing the brunt of it, at a loss of 67.6 million.
In a more detailed breakdown of the 2022 financial year, the first quarter saw the company face a loss of 29.8 million, followed by the massive second quarter loss. The third quarter loss lowered to 15.23 million before escalating again to 52 million in the final quarter.
The financial situation has raised considerable concerns over the company's liquidity risks, as the short-term liabilities are significantly high. To compound the concern, the Maldivian's short liabilities surpassed its current assets in the last quarter of 2022, posing a potential threat to its financial stability.
Historically, Island Aviation had been a profitable company during President Yameen's tenure. The company's shift into loss-making operations raises critical questions about the administration of President Solih, who assumed office following Yameen.
In fact, the financial deterioration of Island Aviation mirrors a more extensive trend of fiscal instability under President Solih's leadership. A significant number of state-owned companies have faced financial setbacks since he came into power, hinting at potential governance and policy concerns.
This 164 million loss underpins the ongoing challenges that the airline, and by extension, the Maldivian economy face. The airline industry, which plays a vital role in the archipelago nation's economy, especially its tourism sector, needs stable and sound financial management to ensure sustainable operations.