Sri Lanka opens trade and tourism flood gates for China
BEIJING – Sri Lanka will soon be experiencing a new boom in Chinese travellers and traders with the launch of the Free Trade Agreement (FTA) this month between the two countries aimed at attracting foreign exchange as a stimulus to economic growth.
Forbidden City
Officials in China are optimistic that China will open the gates of trade and tourism for the island nation under the FTA which will result in a massive tourist influx.
Chinese investors , businessmen and traders are eying Sri Lanka’s gem and jewellery sector with renewed interest and they will step in to invest heavily in this field, a senior official said adding that the country should take advantage of this new found Chinese interest with necessary safeguards.
The Chinese economy has grown tremendously over the last 10 to 20 years, and inbound and outbound tourism in China is growing even faster.
This is the opportune moment to strike a deal with China to make the balance of trade favourable for the country, he opined.
There is positive sentiment on Sri Lanka among rich Chinese and the country should attract them by offering high end air travel and other facilities, he said adding that promotional campaigns of Sri Lankan Airlines and the Sri Lanka Tourism Authority are now bearing fruits.
Sri Lankan Airlines’ contribution to the national economy through the multiplier effect in the tourism sector is considerable and its benefits are being passed onto those engaged in construction, furniture, transport and food and beverage industries, airline CEO Kapila Chandrasena revealed.
He noted that the contribution of the national carrier to the Sri Lanka economy is US$1.3 billion a year or 2.2 per cent of GDP.
Despite its unavoidable financial losses SriLankan Airlines’ net margin has improved, he emphasised.
But these positive factors were not brought into the focus of the public domain, he said, adding that jet fuel accounted for 44 per cent of Sri Lankan Airlines’ operating expenditure last year and revenue did not keep up with the rise in fuel costs.Mr. Chandrasena made these observations at a meeting with a group of journalists on Wednesday, August 20 on the eve of their departure to China on an official tour arranged by Sri Lankan Airlines.
Beijing Regional Manager Asia Pacific, SriLankan Airlines, Dimuthu Tennakoon
“Our focus during the last three years was to improve the unit revenue while maintaining unit cost in the same range,” he said.
The Treasury has already infused $225 million into the national carrier over the past two years, and bridging facilities for a further $275 million is now being arranged.
The airline is looking at all aspects on how best to expand in China. It operates 15 flights per week to Beijing, Shanghai, Guangzhou, Canton and Hong Kong.
Most of these Chinese tourists flying in the national carrier were either disembarking in Thailand or proceeding to the Maldives; he said revealing that the airline currently operates flights to Colombo and Malé for the Chinese travellers.
Attracting more Chinese passengers will compel SriLankan Airlines to develop its hub model, he said.
There is a high-volume traffic flow between Asia and Africa, and especially China and Africa, Mr. Chandrasena revealed adding that efforts to capitalise on this geographical advantage are largely at the “market evaluation and modeling stage.
He noted that the national carrier also focuses on sub regions in China with a population of more than 100 million and the promotional campaigns are being carried out with the aim of luring more Chinese travellers to the country.
The airline is now operating eight direct flights a week to Beijing and Shanghai from Colombo and vice versa paving the way towards making the tourism sector as the largest foreign exchange earner for the country by attracting 2.5 million tourists in the year, officials said.
They expressed the belief that the number of Chinese tourist arrivals to the island nation will surpass 100,000 this year.
Sri Lankan officials in China outlined these details during an official visit of a group of senior Sri Lankan journalists to the Chinese cities of Beijing and Shanghai, recently.
The tour was arranged to increase awareness on the two mega cities and announce the national career’s plans to expand its operations in the region through increasing frequencies and introducing new destinations.
The group walked the Great Wall, visited the Tiananmen Square, Forbidden City and the Summer Palace in Beijing, and witnessed incredible Chinese acrobatics after concluding their 3-day visit to the vibrant commercial city of Shanghai.
In Shanghai, the visiting journalists climbed 351 metres in a lift to the sightseeing floor of oriental Pearl Radio and TV Tower and strolled along the Bund to see the difference of “old and new China”. Journalists also visited Shanghai Museum with one million pieces of collections including 130,000 pieces of national treasures. The group of journalists was accompanied by Deepal V. Perera, Manager, Media Development (Corporate Communications), SriLankan Airlines and Amith Wijayasuriya, Senior Manager, Public and Government Affairs, SriLankan Airlines.
In Beijing Regional Manager Asia Pacific, SriLankan Airlines, Dimuthu Tennakoon told the visiting SriLankan journalists that the top management of Sri Lankan airlines headed by Chairman of the airline Nishantha Wickremasinghe, and CEO Kapila Chandrasena was instrumental in launching this direct flight to China and it is being operated smoothly.
The Business Times on September 8, 2013 highlighted the initiative to start direct flights to China from Colombo and vice versa quoting Mr. Tennakoon who said that it will be a money spinner in the near future.
He noted that his prediction is now becoming a reality with the steady rise in the Chinese tourist arrivals in Sri Lanka reaching 67,408 during the first seven months this year from 27,599 during the same period last year.
The cabin factor of flights Colombo/Beijing has also increased to 97 per cent in July 2014 from 73 per cent in June 2014.
China’s revenue contribution to Asia pacific region flight operations of Sri Lankan Airlines was 40 per cent, he disclosed.
The airline made these achievements by conducting awareness campaigns workshops and many promotional campaigns for tour operators in nine out of 15 sub cities in China as well as in Shanghai and Beijing, he added.
In a move to meet the increasing demands for air services between China and Sri Lanka, SriLankan Airlines is now operating a weekly flight to Chongqing from Colombo, returning via Bangkok, he revealed.
“We are also making every effort to provide the necessary facilities for Chinese travellers on board as well as on the ground. Chinese-speaking passenger relations officers have been recruited to travel on flights to Beijing, Shanghai and Hong Kong,” he disclosed.
Area manager in Shanghai, Chammika Iddagodage told journalists that around 25.000 Chinese in Shanghai have travelled in the national carrier to Sri Lanka during the first six months of this year and the cabin factor of Sri Lankan flights from Shanghai has increased to 95 per cent in July 2014 from 84 per cent in June 2013.