Making Colombo an aviation hub

Construction work on the Mattala International airport progressed in 2010 and phase 1 would be completed by 2013. The Bandaranaike International Airport (BIA) expansion project is also in progress. This includes expansion of the transit area, construction of a new baggage re-claim area, multi-storey car park and widening of the existing runway.

The feasibility study for the second runway of the BIA commenced in 2010, said the Central Bank Annual Report 2010. Development of the domestic airport network is also planned and priority has been given to Koggala, Ampara and Palali airports.

The gradual recovery in the global economy, coupled with the post conflict improvement in the tourism sector saw a market increase in air passenger and freight transportation. The passenger traffic carried by SriLankan Airlines (SLA) increased by 24.5 percent in 2010. BIA handled the highest ever transshipment freight of 26,445 metric tonnes in 2010 recording an increase of 43 percent compared to the previous year.

The air cargo handling capacity was doubled during the year with the addition of a new export terminal. The current capacity stands at 300,000 metric tonnes of cargo per annum. Domestic air travel activities declined during the year due to a significant decrease in domestic passengers travelling to the North and the East by air, since alternative modes of transport are now available at a lower cost.

The financial performance of the aviation sector was favourable in 2010. The revenue realised by SLA increased by 26.3 percent to Rs. 67.835 million, while operating costs increased by 12.3 percent to Rs. 74,107 million resulting in an operating loss of Rs. 6,272 million which was a decrease of 49 percent compared to the previous year.

The increase in revenue and implementation of stringent cost control measures contributed to the reduction of SLA’s operating loss. Mihin Lanka recorded an operating profit of Rs. 416 million in 2010 compared to the operating loss of Rs. 666 million incurred in 2009.

The government has expressed its intention to develop the country as a regional aviation hub. Given its geographical location, coupled with the BIA modernisation and construction of a second international airport, the airline industry in the country could grow rapidly with the potential to emerge as a highly competitive regional hub.

Also bilateral air services with more than 60 countries, the presence of domestic land aerodromes and recreational aviation facilities can help the country exploit tourism potential in association with the aviation hub.

However, it is essential to align government agencies and industry partners to bring about certain infrastructure improvements to create a competitive business environment which will contribute to increased growth and efficiency of the aviation industry. Issues related to human resources of the aviation industry need to be addressed via setting up of specialised training centres and introduction of appropriate specialised curricula at all education levels to build an industry oriented human resources base.

To emerge as a successful aviation hub, greater collaboration, information sharing and efficient use of existing technologies across the aviation value chain is needed. This can help streamline airport processes and improve service delivery and customer satisfaction.

Encouraging the private sector to play an active role can help fast track the country’s transformation into an aviation hub in an efficient and sustainable manner.

Construction work on several aviation development projects is also in progress.