Financial Times

Price war on Colombo-Gulf routes
A price war among airlines on the Colombo-UAE route is seen benefiting migrant workers in the region with many Sri Lankans showing preference for the newest contender, Air Arabia from Sharjah or Dubai.

The Sharjah-owned airline, which launched flights between Colombo and Sharjah in January with fares almost half the rates charged by some of its competitors to neighbouring Gulf destinations, said last week it was increasing its frequency due to 80 percent load factors. Flights have increased to four days a week from April 1, from three previously, in response to increasing customer demands.

Migrant workers in Sharjah told a reporter from The Sunday Times FT last week that many Sri Lankans were considering Air Arabia. "They are half the rates of other airlines. It is much cheaper," said a Sri Lankan administrative manager at a garment factory as he prepared to return home next week at the end of his contract.

Offering Rs. 21,000 for a return fare, Air Arabia is the only airline flying to Sharjah from Colombo. Sharjah is only about 20 minutes by road from Dubai and Air Arabia operates a bus service between these two points. About 30 percent of its passengers to Sharjah are those going to Dubai.

Qatar Airways charges Rs. 9,000-10,000 one-way to Dubai and Czech Airlines Rs 15,800 one-way to Dubai. On the other hand, Emirates Airlines flying to Dubai and Abu Dhabi charges almost double the one way fare with national carrier SriLankan Airlines also in the same price range. The last two-named airlines were the most frequently or only used airlines on these sectors for many years, enjoying a virtual monopoly.

Air Arabia is a Sharjah government-owned airline and says it provides cheap fares in the market without sacrificing the standards of quality or service offered. Etihad Airways - the national carrier of the UAE - recently began flying thrice weekly to Colombo posing another challenge to long-established airlines.

Sources at the older airlines however say companies like Air Arabia and Etihad are able to reduce fares due to subsidies from their respective governments.

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