News Desk
MALÉ, – The government faces steep structural and macroeconomic hurdles in its efforts to lower domestic airfares, with current ticket prices already closely aligned with underlying operational costs, the Minister of Tourism and Civil Aviation, Mohamed Ameen, told Majlis on Tuesday.
Responding to legislative inquiries during a session of the People’s Majlis, Minister Ameen acknowledged public dissatisfaction with current fare rates but cautioned that market realities limit the scope for immediate reductions.
The minister highlighted that the ATR turboprop aircraft predominantly utilized for domestic routes across the archipelago carry high maintenance and operational overheads. Despite global inflationary pressures, he noted that the government has actively insulated local commuters from the financial shocks felt by the wider aviation sector.
“Driven by the ongoing conflict in the Middle East, global aviation fuel spikes have forced international airlines to raise ticket fares by 30 to 40 per cent,” Minister Ameen explained to lawmakers. “However, following direct policy interventions by the President, we managed to absorb these rising overheads through alternative budgetary adjustments. Maintaining domestic fares at their pre-crisis baseline for our citizens has been an exceptionally challenging task.”
Domestic Aviation Financial Framework
- Operational Demographics: Lowering base fares remains structurally difficult due to low passenger volumes on specific regional routes, preventing airlines from achieving the economies of scale required for low-cost operations.
- Dual-Tariff Adjustments: While local fares have remained frozen, the national carrier, Maldivian, implemented a strategic price hike for foreign tourists in April to counteract rising fuel expenses.
- Aviation Fuel Inflation: The targeted tariff increase for tourists was triggered by the Maldives Airports Company Limited (MACL) raising jet fuel prices at Velana International Airport from $1.19 to $1.99 per litre.
- Aviation Outlook: The minister concluded that until regional passenger traffic reaches the volume necessary to sustain high-efficiency flight schedules, artificial downward pressure on ticket prices will remain commercially unviable for domestic operators.
