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The prospects for Sri Lanka in becoming an aviation hub came under spotlight at the Forum on Five Hubs organised by the Daily FT in partnership with the University of Colombo MBA Alumni Association last week.
Civil Aviation Ministry Secretary Dr. Ravindra Ruberu delivering his presentation, ‘On our to an aviation hub’ noted that Sri Lanka has an excellent track record in airline safety and security with an independent audit by ICAO placed Sri Lanka in the No. 1 position in South-Asia 
(SAARC) and 4th in Asia-Pacific out of 34 countries (after South Korea, Singapore and Japan) for its degree of compliance with international standards locally.
“We are already on our way towards becoming a Hub,” Dr. Ruberu said. “We passed the 50,000 aircraft movements per annum mark for the first time in 2013, passenger movements increased to 7.3 million in and air cargo handling increased by 9% in 2013.”
In making Sri Lanka an aviation hub, there are six key areas to be looked at, he explained. They are: Training and research facilities, development of national airlines, development of airports, improvement of international aviation affairs, improvement of passenger services and aviation related activities.
Development of Airports
Ruberu acknowledged that Mattala Rajapaksa International Airport, the alternative airport to the country, was developed under two phases, of which we are currently at the second. Under phase one, 1 million pax was the capacity per annum while at the completion of phase two, this will increase to 5 million pax per annum. The airport can handle some of the largest aircrafts such as the A380.
The Bandaranaike International Airport currently can handle a capacity of 6 million pax per annum. However in 2013 the capacity handled at BIA was 7.3 million passengers. “Under phase two of the development the total handling capacity will go up to 15 million pax per annum. In the interim, existing terminal expansion in 2014 to cater to excess passenger capacity,” he said.
Sri Lanka’s domestic airlines are also now increasingly being used, Ruberu asserted – and for a few, it is fairly cheap to fly than travel by road for meetings out of Colombo. Already developed and in use are Ratmalana as Colombo Airport, and Ampara, Iranamadu, Anuradhapura and China Bay. Soon, more will enter the network from Batticaloa, Palavi and Kandy. In addition, a free trade zone has been gazetted around Mattala which will see a number of BOI approved investments with hotels, shopping malls etc which will increase the air connectivity via domestic airports.
A sea-air hub in Hambantota, making use of the close proximity of Magampura Port and MRIA will also be built which would support cargo transhipment, leisure activities such as cruise liners, fuel bunkering and logistic support for the port.
Strengthening of national airlines
“No country can be a vacation destination if it has no fleet,” Ruberu expressed. “We need competitive modern fleet, and the replacement of A340s with A350s and A330s will commence in October 2014.”
As at 2013 SriLankan had 22 aircraft while Mihin Lanka had three, under the fleet expansion project, the latter is supposed to get two more fleet to its system.
Having identified that most money comes from business class; cabin modernisation to become competitive in the Business Class segment is being looked at while part of the wide body fleet was already upgraded.
Improvement of international aviation affairs
Under this, the country is entering into new bilateral agreements and revising existing agreements, Ruberu explained. “In 2013, new agreements were signed with Kazakhstan, Azerbaijan, Spain, New Zealand, Ethiopia and Finland while some of the agreements with Seychelles, India, Greece and S. Korea were revised.
Improvement of passenger services
Self-check-in counters are now operated by SriLankan airlines at BIA, while methods have been designed to streamline taxi services. “600 permits were issued to taxi operators at BIA,” he said.
“There is a silk-route facility which passengers travelling an all classes can access on payment of a nominal fee.”
Optimisation of airspace is also a key focus. Under this the authorities will keep their eyes on utilisation of the existing capacity to the maximum, modernise navigation systems and in 2013 there was an upgrade in HF communication systems to cover entire FIR. ADS-B (Automatic Dependence Surveillance-Broadcast) will be ready by early 2015 along with a PBN (Performance Based Navigation), he added.
To support domestic passenger air transportation, liberalised policies have been introduced to encourage domestic carriers with private sector participation, while an amphibian air transport is encouraged.
Aviation related activities
Under this falls Maintenance, Repair, Overhaul (MRO) infrastructure now being built in MRIA, airline catering done by SriLankan catering at BIA and MRIA and promoting local produce – with most food items for airlines now purchased locally. MRIA will cater to quick dispatch of perishable items as well.
Training and research facilities
SriLankan Airlines offer world-class training courses at BIA for technical training, advance flight training – type rating (including foreign pilot training), service training and International Aviation Academy (IATA accredited courses).
“Over the next two years all training will be integrated to form the Advanced Aviation Academy at Mattala.”
Support from Sri Lanka Air Force
Ruberu noted that Sri Lanka Air Force performs Helicopter Underwater Egress Training (HUET) for all civilians who wish to do off shore operations. “They are also engaged in training of staff in civilian carriers in first aid and aviation medicine related subjects. They also play a major role in domestic civilian flight operations and in construction of domestic airports.”
Priority areas for development
“There needs to be a close collaboration between the hubs,” Ruberu assured.
There is also a need for increased investments in relation to the airports, and especially the Mattala free zone. Development of good links between the tour operators, airlines and tourist industry in general is vital and the national airlines must be further strengthened. “The cargo trans-shipment should be enhanced and expansion of aviation related training and research.”
Pix by Upul Abayasekara and Lasantha Kumara
Aviation hub: on the right track, but lot more to be done Exploiting opportunities that arise with the aviation hub
Sri Lanka Airport and Aviation Chairman Prasanna Wickramasuriya at the panel discussion assured that the hub concept, designed under a systematic approach, can be achieved not only by creating a conducive environment but by the general public believing that this is a possibility by 2020.
Location-wise, from Sri Lanka it will only take four hours to reach main cities in Asia and in eight hours to reach all continents other than American continent. Our skies are extremely peaceful in comparison to other limited skies which is a key factor that would help Sri Lanka take benefit from the increasing air traffic, with over 50% of the major airlines such as Boeing and Airbus’ new manufactured fleet is said to be for the pacific region.
“Carriers have aggressive growth plans and we must grab these opportunities and positively move towards becoming an aviation hub,” Wickramasuriya noted that there is a 90% increase in the number of aircraft flying over Sri Lanka since 2009, generating more income for the country as every aircraft that passes over the country having to pay a fee for airspace.
Acknowledging the negative sentiments many harbour towards Mattala, the Chairman noted that with the ability to handle A380s more pilots are now taking SriLankan on their routes when flying.
“Infrastructure in airports is also very important,” he said. “The number of passengers coming in to Sri Lanka in 2009 was 4.2 million, which has increased to 7.3 million three years, almost a 72% increase.” Stating that this was also a factor in developing the Mattala Airport, Wickramasuriya noted that when capacity expansion plans are completed in BIA and Mattala in 2020, the country will be able to handle a 21 million capacity by 2020.
To exploit these opportunities there is a four-fold strategy in place, he said. This includes correct infrastructure in place, effective interface with the domestic aviation industry, effective interface with other allied industries as well and exploiting our position as a knowledge centre.
“Our infrastructure presently caters to our terminal needs. We need to upgrade them to be able to handle the additional transit capacity required for a hub. Capacity enhancements at both BIA and MRIA would increase the country’s passenger handling capacity to 21 million passengers per annum and the cargo handling capacity to 450,000 Metric Tons per annum.”
He noted than when assessing transit passengers, we are not talking only about the passengers who do not leave the airport, as there is an expectation of a high volume of passengers who will spend a day or two in Sri Lanka before their onward journey – this is where proper linkage to the domestic aviation industry is important. In the same manner, it is important to properly interface with other allied industries such as cargo, tourism, hospitality, foreign employment, etc. “MRIA has large potential to provide warehousing and connectivity for cargo industry,” he said. “We are also looking at partnering with industry leaders to set up MRO facilities at MRIA which would be a major thrust towards hub status. Partnering with the ports will be of mutual benefit to both industries.”
Importance of the national carrier in making the hub
SriLankan Airlines Chief Marketing Officer G.T. Jeyaseelan noted that if Sri Lanka is to have an ideal aviation hub, that would mean having some 25-30 airlines arriving and getting off within an hour.
However, for us to achieve that there is a long way to go; but we are on the right path. “The national carrier has a major role to play in this regard,” Jeyaseelan said. “If you take any successful hub in the world, they also come with a very strong national carrier that operates at high frequencies to destinations.”
Referring to Ruberu’s statistics on fleet expansion, he noted that by 2020 the national carriers will have in excess of 60 aircraft – this, he said, is a prerequisite if we are to become an aviation hub. “Bilateral policies and infrastructure alone will not help – those are prerequisites. We have the geographical location, the infrastructure is now taking shape, and the airport size must triple in the next few years.”
Drawing examples, he noted that no one spoke of Dubai prior to them developing its airport infrastructure and promoting destination Dubai as a leisure, business and transit destination. “Our composition as a desired destination must change,” Jeyaseelan said. “We must make it profitable for airlines to operate from Sri Lanka.”
Even though the country has an aviation industry that dates back 100 years, airport expressways began to take shape only last year, he recalled. “Unless airport capacities increase threefold daily, we will not reach hub status. We are getting there; but it will take a long time. Strengthening the national carrier, investment in infrastructure, connectivity out of Colombo, concentration on its aircraft fleet and its daily frequency must be looked at,” he expressed.
Learning from Dubai
It is true that the airline made Dubai, Emirates Airline Sri Lanka and Maldives Area Manager Chandana de Silva acknowledged.
“On a macro level, looking at the five hub concept, look at what Dubai has done,” he urged. “The primary concern is location, which Sri Lanka most definitely has.” As an island, Sri Lanka needs airlines to connect and keep up with the rest of the world. Two airports, as the country currently enjoys gives it a huge advantage in creating connectivity, de Silva said. What is next is openness, he said – i.e. open skies and fair competition.
“At that time (when Emirates was launched) it had to compete with some 150 airlines. The Government was focused on a combination of things – how do we develop Dubai? By bringing in world renowned brands and hotels, etc.” All of this is in our court now; he asserted adding that in a macro environment the Government of Sri Lanka’s focus is ideal. “Dubai also focused on road and infrastructures development and played on its close proximity to Middle East and European countries.”
De Silva questioned: “Sri Lanka is ideally located four to five hours to from Dubai, where 80% of expats are working. So are we not a hub? Can we do this?” certainly, he said. “We are in the right path. We can on getting the little ingredients together and make this an aviation hub.”
What can be changed to
facilitate the hub?
While the location is set, and infrastructure is now taking shape with the Government taking somewhat daring, yet “absolutely necessary” steps such as the building of a second international airport; it will take time for the economic and investment returns to come through and shine, Cinnamon Air Director Romesh David said.
Years ago, London was the hub of the world, however today many have moved to Dubai and Singapore. “Sri Lanka has a huge gap with other regional and passenger handling numbers.” What is needed is a policy dichotomy in terms of what the industry and government want and aspire as a local industry. “We must strongly promote the national carrier; this is a must. They are the ones who carried tourists during the war.”
However, if you want to be a hub, you need more airlines, he added.
Charging exceptionally high rates in terms of ground handling and passengers will not help, David assured. “I suggest we should let people come in and handle competitively at ground level.” The country must also make fuel available here. Commenting on GSAs, he noted that if an airline wants to operate here, they should be allowed to as well. “We have a gap that needs to be bridged.” |
