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Business

Civil Aviation
Dogfight over Jaffna skies

A battle royal is brewing over the lucrative business to operate passenger flights to Jaffna with at least five airline operators in the fray for what has become a dwindling market.
The re-opening of the Jaffna highway has resulted in a sharp fall in demand for travel to the peninsula by air with less than 150 passengers available one way each day.
But domestic operators are showing keen interest in operating passenger aircraft to Palaly now that the government has decided to lift the ban on domestic civil flights.
They are banking on the fact that the speed and convenience of air travel will generate enough traffic to make Jaffna flights profitable given the poor state of the A9 highway and the time taken to travel by road.

With the battle for market share intensifying, prices of air tickets are expected to fall.

domestic carriers
The domestic carriers that have applied to the Civil Aviation Department for licences to operate passenger flights to Jaffna are Lionair, Expo Aviation, Airlanka International, and Serendib Express (Pvt) Ltd. The national carrier SriLankan Airlines also has expressed interest in the Jaffna flights.

All the domestic operators have said they want to extend their services to other airfields as well to fly tourists to beach resorts and cultural attractions in other parts of the island. "It's going to be interesting," said Chandran Ratnam, chairman of Lionair, the most experienced domestic operator, which has done over 14,000 flights carrying more than half a million passengers to Palaly and other airfields since 1994, and plans to resume its daily scheduled flights to Jaffna.

"The market is not big enough to support more than two operators (on the Palaly run)," Ratnam said. "There'll be a big fall out. It's only a matter of time. Let the better man win. We have been in the business in the worst of times and we intend staying in the business."

Leasing
The company intends to lease an An-24 with a foreign crew and later go for Western aircraft with a capacity of 40-50 passengers, he said. "We aim to replace the foreign crew with Sri Lankans as soon as possible - naturally giving preference to students from our flying school," Ratnam said. "Because of our commitment to the aviation industry, we have built up the infrastructure since 1994 to train pilots and engineers."
The use of Sri Lankan crews would provide a big advantage in terms of costs.
The ban on civilian flights, imposed after Tamil Tigers shot down a Lionair plane in September 1998, crippled the domestic aviation industry which till then had been thriving with up to half a dozen operators at one point in time, using fixed wing aircraft and helicopters to fly tourists.

Currently, the only civil passenger flights are between Ratmalana and Palaly operated by the Air Force's Helitours using two An-24 aircraft leased by Lionair, which for long had a virtual monopoly on this route.

Airlines hoping to operate domestic passenger flights have already recruited cabin crews and even advertised while their requests for licences are being evaluated by the Department of Civil Aviation.

Expo Aviation, a member of the Expolanka Group of Companies, has announced it plans to start scheduled passenger flights between Jaffna and Colombo. The company is in "the final stage of certification for passenger operations," it said in a statement.

The company now has a licence only for cargo operations. Expo Aviation has brought in an Il-18 passenger aircraft with a capacity of 100 passengers that initially will be operated twice a day to Palaly.

"It will be a two-class operation with eight business class seats and the balance being economy class," said Sabri Marikar, chief executive officer of Expo Aviation.
The airline now operates a leased Il-18 and a company-owned An-12 on international cargo flights to the Far East, the Middle East and regional destinations that include Male and Gan in the Maldive Islands, as well as cities in the sub-continent.

Expanding operation
Businessman Nahil Wijesuriya has said his company, Airlanka International Ltd, wants to expand its existing operation, which ferries cargo between Dubai, India and Pakistan, to include passenger flights to Jaffna. Air Lanka International plans to fly between Colombo and Jaffna twice a day, seven days a week and hopes to expand its route network to Trincomalee and Batticaloa.

Another operator, Serendib Express (Pvt) Ltd., is also in the fray and has announced its intention of operating two 48-seater aircraft on the Palaly run. SriLankan Airlines too is keen on being able to offer flights to Jaffna either on its own using a small turbo-prop aircraft or in alliance with a domestic carrier.

hectic preparations
The domestic operators have been making hectic preparations to resume the Jaffna flights knowing that the first off the blocks would have an edge over the others and be able to capture a big chunk of the market. But these plans have been delayed because scheduled passenger services cannot be resumed until the Palaly airport is upgraded with the facilities to handle civil flights.

"God has a way of levelling the field," declared Ratnam whose firm, Lionair, went to the extent of filing a case in the Court of Appeal seeking to quash a decision by the Director General of Civil Aviation, Lal Liyanarachchi, in March not to renew its licence for passenger flights.

The petitioner alleged that it was being unfairly denied a licence to operate domestic passenger services and reserved the right to pursue an application for an interim order staying the granting of approval to any other airline operator to start domestic passenger flights until the final determination of its application.

The company had sought more time to comply with civil aviation regulatory requirements. Ratnam said Lionair also has plans to go regional and operate passenger services to other countries. "We have been asking for permission since 1996," he said. "Other than SriLankan Airlines we were the only airline operating in the 1990s but we were unable to operate passenger flights overseas because of restrictions imposed on other carriers. But we're ready to go as soon as the government gives the green light."

Airlanka International and Expo Aviation also have said they would like to operate passenger flights to overseas destinations. Airlanka International operates a cargo freighter using Colombo and Sharjah/Dubai as their hubs to India and Pakistan.
Wijesuriya, also chairman of the Co-operative Wholesale Establishment, has said the airline's future plans include expanding this network to the Maldives and Thailand.

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