Boost to Maldivian

Since the controversial demise of Air Maldives the country has been without a national airline in the international market. The issues surrounding the failure of Air Maldives up to today hasn’t had an independent analysis, we need such an audit to learn lessons from the mistakes of the past.

To compensate for the failure of Air Maldives a new domestic airline was launched as Island Aviation. Through a steady growth strategy the company has expanded its fleet and operations successfully. The company currently has a fleet of 5 aircraft of which 4 are Bombardier Dash 8 family, composing of 2 Dash 8 Q300 (50 seat) and 2 Dash 8 Q200 (37 seat) aircrafts.

The company then took the bold step of venturing into the international market with its turboprop fleet much to the amusement of critics and competitors. With its dedication and effort it has overcome the odds and is successfully expanding its international operations including a rebranding of the airline division as Maldivian. The company’s executive management and staff should be acknowledged for this progress and growth which was generated on its internal profitability and resources. The company has announced the next step in its growth by the delivery of a Dash 8 400 (75 seat) aircraft around early 2010. This looks to be a sound decision based on the fact that turboprops are more fuel efficient than jets and the Q400 matches the speed of a jet aircraft which used to be the main weakness of turboprops.

In light of the importance of having a suitable national airline the government needs to work out a solution to give a boost to the efforts of Maldivian. As such mainly two points are of importance now first increasing the capital of the company to speed up its expansion and putting in place an independent and capable strategic management body.

To increase the capital of the company the government should increase its share in the company and allocate a percentage of the company for interested private parties to invest in. For example let 4 private parties invest up to 10% share each, thereby giving a total investment of 40% to private parties while government holds 60% of the company. This seems to be the viable option since attracting an established foreign airline to a JV is slim due to the current economic conditions and the previous assessment of the feasibility by Qatar Airways.

With this increased capital the company should step up its expansion plans and look to acquiring an aircraft of greater capacity and range to allow it to serve feasible routes such as Bangkok, Malaysia and Dubai. An ideal aircraft for the purpose would be an Airbus A319 or similar type. Such an aircraft should be acquired in the short term, preferably somewhere in 2010. To aid this, the physical and human resources of the company should also be developed.

The company should also be appointed a professional and independent Board of Directors and ensure compliance with Corporate Governance Code even though it’s not a public company. It should also be looked into the viability of bringing in a foreign CEO who’s experienced in international airline operations. The government should reduce its dependence on the company’s dividend (as with other SOE’s) as a primary source of government revenue and let the company reinvestment a greater portion of its profits into its expansion.

Amendment to Armed Forces Act

This article authored by me was published initially at Doctor Abdullah Waheed's blog since this blog wasn't established at that time. Im republishing it here, revised in light of some changes that have taken place recently, such as the change at the post of Chief of Defence Force. In the article outlined are a few points for the Government that took oath on 11th November 2008 to consider regarding amending into the Armed Forces Act, mainly on the post of Chief of Defence Force.

The first point of note is to set out a fixed term of duty for the post of the Chief of Defence Force (CDF). The post's duties and responsibilities are well laid out in the law. The addition of a fixed term for it is essential to ensure the flow of promotion effectively among senior ranks and secure the position from being dominated by a single person for an undue period of time. The duration of the fixed term could be set after looking at those of other military bodies and adjusted to suit Maldivian environment; the standard term found in most countries is 3 years. And also the person holding the post should be limited to serving a single term of duty.

In connection with the first point, the person holding the position of the Chief of Defence Force would need to be exempt from the clause in the law regarding the compulsory retirement age for military personnel. The reason for this is to ensure the stability of the term of duty for the position, thereby giving the person holding the position an unhindered 3 years to put policies and strategies into effect. The lack of this provision would result in the rapid turnover of personnel holding the post, thus depriving the force of a stable and effective leadership.

Thirdly is to lay down a provision requiring that appointments to the posts of CDF / Vice CDF are done with the approval of the parliament. To ensure a faster and secure process through the parliament the approval process can be set to be carried out in the security committee of the parliament without going to the main parliament floor. The reasoning behind this rule is to ensure protection from politically motivated appointments to the senior positions. This would serve to keep the defence force apolitical. This is a standard procedure followed in numerous other countries as well.