India's GMR Infrastructure released (29-Nov-2012) a statement on the decision of the Government of the Maldives to void the 25-year build-operate-transfer contract of GMR Male International Airport Ltd (GMIAL) for Male International Airport and take possession and control of the airport. GMR stated the termination of the concession agreement is unlawful and premature and is being challenged by the company on legal grounds. GMR disputed the agreement can be made void. It also noted the action has been taken while a disagreement over the contract and fees/charges at the airport and those to be paid to GMR are under arbitration in a Singaporese court. [more - original PR]
GMR to challenge cancelllation of Male Airport concession
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MEGA Maldives Airlines Part 2: MEGA attempts to diversify beyond the China-Maldives market
MEGA Maldives Airlines is attempting to reduce its reliance on the China-Maldives market with new routes to India, Malaysia and Saudi Arabia. By the end of 2016 MEGA plans to resume services from Male to Kuala Lumpur and Jeddah – markets it briefly served in early 2015 – and commence operations to India, with an initial service from Male to New Delhi.
The new services, along with other new routes which are under evaluation, are part of a revisited diversification strategy. MEGA currently only serves China, but since commencing operations in 2011 has experimented several times with other markets. MEGA, which operates the same number of aircraft and routes as three years ago, needs to diversify successfully to resume growth.
This is the second half of an analysis report on MEGA Maldives. The first half examined the recent contraction in the China-Maldives market and intensifying competition. This half will focus on MEGA's plans for entering other markets, and its previous attempts at diversification.
MEGA Maldives Airlines Part 1: China-Maldives market contracts and competition intensifies
The Maldives has experienced a drop in visitor numbers from China, its largest source market, prompting MEGA Maldives Airlines to restructure its network and defer expansion. The privately owned leisure airline currently only operates a fleet of three aircraft – the same number of aircraft as three years ago – and has fallen well short of an initial objective to operate 18 aircraft by the end of 2016.
MEGA’s scheduled network is limited to three destinations in China. The airline is finally starting to increase its reliance on other markets – including India, Malaysia and Saudi Arabia – under a diversification strategy which it has had for a few years but has so far struggled to implement.
MEGA needs a more balanced network to resume growth. Its recent troubles, including layoffs, highlight the risk of relying too much on a single market.