Govt. set to resuscitate domestic aviation industry

 By Chathuri Dissanayake

The Ministry of Transport and Civil Aviation is set to carry out major overhaul in the domestic aviation sector to develop the industry, including infrastructure development in several domestic airports currently managed by the Sri Lanka Air Force (SLAF). 

The industry, which took off after the end of the civil war, subsequently took a downward turn as operational costs rocketed, resulting in many domestic airlines grounding operations over the last few years. In a bid to address the lack of investments in the sector, the Government is taking steps to upgrade infrastructure and regulatory frameworks in domestic aviation. Currently, no clear policy governing civil aviation exists, hindering development due to lack of conformity with international standards. 

To address the issues, the line Ministry, along with National Policy and Economic Affairs Ministry, plans to make sweeping changes in terms of operating principles, airport infrastructure, management and legislations to make the industry which is currently limited to charter flights at high prices more viable. 

The Civil Aviation Authority Sri Lanka (CAASL) is to work out a possible mechanism to utilise Airports under SALF management, which includes the Trincomalee, Sigiriya, Pallali, Hingurakgoda and Koggala airports, in compliance with international standards, which requires the country’s Civil Aviation Authority to handle all domestic aviation. These airports will be made available for the carriers on a needs basis, while carrying out infrastructure development with both Government and donor funding. 

Following a joint call for Expression of Interests by the National Agency for Public and Private Partnerships (NAPPP) and Director General Civil Aviation, five bidders have made investment proposals. The five investors, Saffron Aviation, which runs Cinnamon Air, international investment company FITS Aviation, SJ Global Investments, California-based Investment Company Lotus Air and IWS Aviation, are eligible to apply for required license permits and facilities for operations. The Government has decided that the permits will be granted on a first come first serve basis by the Director General of Civil Aviation due to the limited capacity available. 

Further, the Government has also decided to setup a dedicated domestic terminal in the Bandaranaike International Airport (BIA) for common use. Further, as there is no hangar space in BIA to allocate separate spaces for each operator, a common hangar space will be constructed for maintenance work and a separate hangar space for each operator in the Ratmalana Domestic Airport for night parking of aircrafts. 

The Cabinet also gave approval to allocate a portion of the current Apron D of BIA as a designated domestic apron to be utilised by all domestic flights. Further, self-handling by private operators will be permitted in domestic airports with BIA ground-handling and cargo charges set to undergo a downward revision for domestic carriers in consultation with SriLankan Airlines. 

The Ministry of Transport and Civil Aviation has been granted authority to determine rates and conditions for landing of seaplanes in different water bodies in the country where, to date, the CAASL had no authority to determine the landing charges. The Government also decided to remove value added tax charges and withholding tax on aircraft leases. As a further concession, landing and parking charges will be waved off for a period of one year from the date of commencement for all private operators.