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Still Grounded      
30 October 2006 14:38:48
Sri Lankan budget airlines struggle to get off ground
 
Oct 30, 2006 (LBO) – Sri Lanka’s first budget airlines to fly international routes are struggling to get off ground, with approvals pending from Sri Lanka’s Civil Aviation Authority (CAA).
The island’s airline regulator, the CAA says the process has been stalled due to delays by potential new operators in supplying all the necessary technical information.

“They (potential new operators) have not yet completed all the requirements and so we are still in the process of certifying them. The process has been stuck in terms of the lack of response from interested parties,” H M C Nimalsiri, Director General of the CAA, told LBO on Monday.

The race to fly international routes has been narrowed down to two potential applicants Holiday Air and domestic carrier Expo Aviation that were given provisional licences to fly to India subject to technical clearances such as safety standards.

A third applicant – Deccan Air that runs a local helicopter service, has not progressed beyond the initial stage despite being also given a provisional licence, Nimalsiri said.

Holiday Air said earlier this year that it was in talks to tie up with Malaysian budget carrier Air Asia for technical and operational support and would also be the Malaysian airline’s first entry into Sri Lanka.

Plans for a second national carrier alongside SriLankan Airlines have been on the cards however since 2004, when SriLankan’s monopoly on international routes ended.

But appointing a second carrier has been a slow process, with new entrants also battling with SriLankan for access to limited frequencies on lucrative routes to top destinations, such as Indian metro cities.

SriLankan Airlines also has a monopoly on ground handling at the Bandaranaike International Airport until 2008 and is considered to have among the highest charges in the region, which new airlines will have to contend with.

Dubai based Emirates Airline owns a 43.63 percent stake in Sri Lanka’s national carrier, the Sri Lankan government owns 51.05 percent and employees have a 5.32 percent share

Airport and Aviation Services Limited, current managers of the airport recently called for Expressions of Interest to participate in ground handling, with airport officials saying there was a ‘good response’ and tenders were being evaluated.

Meanwhile, the country’s Civil Aviation Authority denied knowledge of a government sponsored budget carrier, which according to weekend media reports, hopes to start up operations.

“We have not received any official information on this and there has been no application for another budget carrier,” Nimalsiri said.

According to news reports, the new carrier hoped to fly to South Asia and the Middle East, largely catering to migrant traffic and has already set up an office locally.