31 August 2016
As outlined by the Maldives Inbound Tourism Statistics, the China-Maldives market is down by almost 11% this year through June 2016. While MEGA has managed to maintain its own passenger volume similar to 2015, this has come at the expense of a reduction in total revenue.
The slow-down in China was one that MEGA partly foresaw and planned for in late 2015. Therefore, an extensive diversification of our route network was planned for this year, which included South Africa, India, Thailand and Europe. Unfortunately, for a number of reasons, many of which were outside of our control, we have had to either reconsider or delay these routes.
On top of this, MEGA also faced higher than expected costs from fleet-wide Heavy Maintenance checks it has had to carry out on its aircraft earlier this year.
While retiring our oldest aircraft was always on the cards for this year as part of a long term fleet renewal plan, the slowdown in China, the larger than expected heavy maintenance costs, and the delay in diversification of new routes means that the replacement will be slower than expected. Therefore we will reduce the fleet from five aircrafts at the start 2016 to three aircrafts for the rest of the year.
The airline business is a highly competitive one and MEGA is proud to be the largest international airline of the Maldives, bringing almost 30% of the Chinese market to the Maldives. Since we began operations five and a half years ago, we have brought almost half a million tourists to the Maldives. However, in order for us to continue to make this contribution, as a private business we have to ensure that our operations are economically sustainable.
To this end, it is with great regret that we have to inform that we will immediately be making 65 positions in the company redundant. Furthermore, we have also made the decision to put on hold replacing 50 positions that are vacant and were due to be filled this year. As a result, the company’s total staff will now be reduced from almost 400 at the start of 2016 to 278. This is a reduction of 50 local staff and 64 foreign staff.
We would like to stress that we continue to believe in our overall growth path. This includes both launching previously planned new routes as well as identifying additional opportunities for the company to generate revenue. As we continue our development, we hope that many of those affected by this redundancy may be able to rejoin the company.
MEGA believes in the future of aviation industry in the Maldives and we continue to work and support the government in the development of tourism and aviation policies.