Aviation sector flies into record 2010 but low yield to keep more airlines out of BIA

By Sunimalee Dias

The Bandaranaike International Airport (BIA) had seen a record passenger and aircraft traffic in 2010 though the latter is unlikely this year given depressed global conditions.

Civil Aviation Authority Director General H.M.C. Nimalsiri told the Daily FT that in 2010 the BIA handled over 5.2 million passengers compared to over 3.2 million in 2009.

According to him 2010 also saw a slew of new airlines as well as expansion in capacity by way of additional services. Five new airlines commenced services to Colombo last year - Jetairfly (Belgium), Spicejet (India), China Eastern Airlines (China), Flydubai (UAE) and Ukraine Airlines (Ukraine).  Etihad Airways (UAE) and Gulf Air (Bahrain) recommenced their scheduled operations and Finnair (Finland) recommenced their charter operations to Sri Lanka during the latter part of 2010.

Nova Airlines from Denmark was a new charter operator in 2010. Arkeyfly (Netherlands) also recommenced operations as a scheduled charter operator from winter 2010/11.

Similarly other airlines that commenced operations to Colombo back in 2009 in comparison were about eight, such as Oman Air and Aeroflot that recommenced their operations from Oman and Russia respectively while Air Italy, Kingfisher and Air Asia commenced operations from Italy, India and Malaysia respectively.

First Choice Airways (Thompson fly), ROSSIA (Federal State Unitary Enterprise), and Air Italy Polska were the Charter Airlines that operated during that period.

Nimalsiri forecast passenger traffic to be over six million in 2011 whilst the country is targeting around 700-750,000 tourists.

He said that the aviation industry is unlikely to witness significant growth in 2011 in the wake of major international airlines still recovering from the 2009 depression.

Although budget carriers have called at the Colombo airport they are looking at different market segments, it was pointed out.

The unlikely increase in air traffic to Colombo has also been attributed to international carriers still overcoming the 2009 economic downturn. Most airlines having reduced their fleet are right now ordering new aircraft, he explained.

In this respect, Nimalsiri pointed out that more airlines would come in once they were capable of doing so, noting that presently there is sufficient capacity at Colombo.

Pakistan’s national carrier PIA previously pulled out of Colombo in 2007 June due to low yield but were not returning to the island nation since the past two weeks, the Director General said. The airline returned with its previous twice a week flights to Colombo.

On the other hand, British Airways is still considering Colombo although the airline is yet to make a commitment, he said.

Nimalsiri attributed low yields was a key drawback in luring more airlines. One reason was excess capacity being mobilised by some airlines while others practiced predatory prices.

However, the Colombo skies are waiting expectantly for the yields to improve on other airlines in a bid to see an increase in air traffic.

At present only one other new airline Hainan Airlines from China is planning to operate from summer 2011, however, it is yet to complete the necessary formalities.

Meanwhile the CAA has committed Rs.30 million for the infrastructure construction of its branch office in Weerawila that is currently underway.

With one runway yet to be done up, the industry is not certain as to availability of airlines committing to land there without first seeing the completion of the airport, he said.

It was pointed out that government has plans to establish this island as an aviation hub as well. However, this is only possible by the end of 2012 once construction work is completed.