President Maithripala Sirisena has appointed separate commissions to probe the massive losses at SriLankan Airlines and Mihin Lanka, which was more or less absorbed into SriLankan after this government came to power. This is a step in the right direction that will help unravel what went wrong with these institutions.
These probes will help the government to decide the future of SriLankan Airlines in the coming year.
The authorities are yet to find a strategic partner for the airline, which has continued to make heavy losses since the termination of the agreement with Emirates Airline of the UAE by the previous Government. It has made a loss of nearly Rs.6.5 billion for the last financial year (2016/17).
With some experts saying that the only other option would be closing down the airline, it is imperative that the Government should find a partner for the airline, preferably from the aviation sector itself. However, if this option is not available, offers from non-aviation companies should be entertained. This process has now gone on for more than a year, with no tangible results.
Thus 2018 should be a watershed year for SriLankan, which is now a member of the prestigious Oneworld Alliance. Closure should not be an option for the airline which flies our flag around the world. But it cannot go on making losses, despite the progress made and awards won for in-flight service. The airline has expanded services to India and started a new daily flight to Melbourne, which is a sign that the present management is keen to turn it around. More destinations are likely to be added next year, as more A320 New Engine Option (NEO) aircraft are delivered to the airline. The Government should also make a decision on whether or not to go ahead with the purchase of four Airbus A350 aircraft, a part of a transaction carried out by the previous Government under dubious circumstances. However, there is a school of thought that SriLankan should go ahead with this purchase and start more long-haul flights, including resuming the Paris and Frankfurt sectors.
Several ministers have spoken of the need to protect the national airline, but this should not mean closing down our airspace for foreign carriers. Despite years of talking, we still do not have an Open Skies policy. The idea of protecting SriLankan should not clash with the Government’s avowed goal of bringing in nearly four million tourists a year in a few years. We need more airlines to fly into Colombo to get to this figure. Already, two airlines have announced new flights to Colombo in 2018 – IndiGo of India and Edelweiss of Switzerland, a subsidiary of Swiss Airlines. We must invite more new airlines to come to Colombo and also urge existing carriers to start more flights, taking advantage of Bilateral Air Services agreements. More landing/take-off slots will become available as the expansion of the Bandaranaike International Airport is completed around 2020, which will enable officials to pitch the airport to more foreign airlines.
There has been much debate about the proposed plan by Air Asia to set up a subsidiary company here, with an eventual fleet of 25 aircraft based at Colombo (BIA), Jaffna and Mattala airports. (This way, Mattala will be able to shed its reputation as the World’s Emptiest Airport). A proposal to this effect has already been submitted for Cabinet approval. This is a timely proposal that aligns perfectly with the plans to bring in more tourists over the next decade. The new budget-oriented airline will be able to tap into unserviced or unutilized routes, without offering direct competition to SriLankan. No damage will be caused to the public purse in this exercise as the entire operation will be funded by Air Asia Sri Lanka which hopes to invest billions of dollars here. Air Asia has set up similar programmes in India, Indonesia and Thailand. It might even be able to begin domestic flights using smaller aircraft.
Many have drawn comparisons with Mihin Lanka in this regard, but it was a vanity project of the previous administration without any sound rationale. On the other hand, Air Asia is an internationally reputed company which has turned around many difficult aviation markets. Colombo is yet to realise its potential as an Asian aviation hub and the Air Asia proposal is a nod in that direction.
Being an island, air travel remains the only regular method of travel to and from the island, apart from the few passenger cruises that call at Colombo Port. Priority should be given to developing the aviation sector, including the revival of SriLankan Airlines. The aviation sector can make a greater contribution to the economy from landing fees to airport taxes. A world-class flight school at Mattala, for example, will be able to attract students from other Asian countries, thus generating foreign exchange. The proposed expansion of the Ratmalana Airport, which is much closer to the Colombo city centre, will also enable more smaller international aircraft to land there. A SriLankan-Air Asia duopoly will serve our aviation and tourism interests well, even as more airlines are vying to begin flights to Colombo.
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