Bid to revive Air Maldives even as legal battle looms

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An attempt to revive Air Maldives is underway even as the airline remains grounded amid debts and the looming prospect of a legal battle between the Maldivian government and Naluri Bhd, the majority shareholder of Malaysian Airlines. It is understood that the Maldivian government has appointed a company called Island Aviation to spearhead the airline’s revival. The company has reportedly approached different parties to gauge their interest in operating flights from Europe to Male. It is understood Singapore-based Region Air, owned by tycoon Ong Beng Seng, is one of the parties which has been approached. It is believed that the operator, which runs mainly charter flights, may look at either scheduled or chartered operations from key European markets such as Switzerland and UK and work with key tour operators in those markets to support the flights. Ong Beng Seng has a stake in the Maldivian tourism industry; he owns the Four Seasons Kuda Huraa Resort. Europe is a key market for the Maldives, particularly during the peak winter months. Leading tour operators such as Kuoni Switzerland operate Edelweiss charters to the islands. Swiss charter Balair also has operations to the Maldives. Meanwhile, a Malaysian Business Times report said that Naluri may face litigation by the Maldives government for allegedly violating a shareholders agreement with Air Maldives. It cited a report in Maldives in the Haveeru Daily, which quoted the Maldivian Minister of State for Finance and Treasury Mohamed Jaleel as saying that Air Maldives had to cease operations due to Naluri’s failure to provide financing that it had committed for the operation of flights to Europe. The paper reported Mohamed Jaleel as saying that the Maldives Government had “repeatedly” been in discussions with Naluri to try and ensure the debts did not grow. “Air Maldives had to bear immense losses because Naluri failed to provide the finance needed for international operations and because of the way the management of the company acted concerning the flights between Europe and Maldives,” the paper said. Naluri executives declined comment. Air Maldives ceased international flights on March 1 and domestic routes on April 19. The airline was set up as a joint venture between the Maldives government (51 percent) and Naluri (49 percent). Under the joint venture, management of the airline was provided by a subsidiary of Naluri, International Aviation Consultants Sdn Bhd. The airline took flight in November 1994, operating to points such as Kuala Lumpur, Trivandrum, Colombo and Dubai. According to the Haveeru Daily, flights between Europe and Maldives were initiated last year in line with a business plan formulated by the Malaysian party. At the end of last year Air Maldives entered into a five-year lease for three A310-300 aircraft, which cost the airline RM4.37 million (US$1.15 million) in monthly payments alone. Sources said the airline lost close to US$70 million after six months of operating between Europe and Male.

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