Role of Domestic Aviation in Sri Lankan tourism

 report by the Organisation of Professional Associations. Resource personnel on Panel were Capt. Amal Wahid, General Manager, Air Senok/Senok Aviation (Pvt) Ltd., Capt. Lasantha Dahanayake, Director Flight Operations, Saffron Aviation (Pvt) Ltd, parent company of Cinnamon Air Asitha Ranaweera, Accountable Manager and Deputy Chief Executive FITS (Pvt) Ltd (Friends In The Sky), Kasun Abeynayaka, Senior Lecturer/Assistant Director Industry Engagement, Events, Travel and Tourism, William Angliss Institute@SLIIT. Moderator was Capt. G.A. Fernando, Member, Executive Council of Organisation of Professional Associations (OPA) & Member, Association of Airline Pilots.

Executive Summary

During deliberations it was evident that in the early 1950s when Australian National Airways (ANA) bought into Air Ceylon with the introduction of two Douglas DC-4 aircraft for the latter carrier’s international routes, two de Havilland D. H.89 Dragon Rapide aircraft were separately acquired by the Ceylon Government for domestic flights on secondary routes. This eight-seat, twin engine, single-pilot biplane was operated by the Ceylon Air Academy, a flying school which was involved in training Ceylonese pilots, engineers and others for the nation’s fledgling aviation industry.

The Dragon Rapides provided connectivity to most of the World War 2-vintage airports scattered across the island, in addition to airstrips at Anuradhapura and Ampara (Gal Oya) airports which were built post-war by the Government of Ceylon.

 Unfortunately, with the departure of ANA and the advent of KLM-Royal Dutch Airlines to the Air Ceylon partnership, the scheduled domestic aviation plan ended. All the Ceylon Air Academy light aircraft were handed over to Air Ceylon Limited. However, in 1964, during the tenure of Minister E.L.B. Hurulle, the Civil Aviation Department Flying Training School at Ratmalana was inaugurated using the same light aircraft that had been taken over by Air Ceylon.

 By then, domestic scheduled flights to most destinations had come to a halt, except for Ratmalana, Kankesanturai (KKS), China Bay (Trincomalee) and Ampara, which were serviced by Air Ceylon’s Douglas DC-3 Dakotas, Hawker Siddeley (Avro) 748, and Nord 262 aircraft. Regional services were also operated to Malé (Maldive Islands) and Trichinopoly (Tiruchirappalli; a.k.a. ‘Trichy’) in South India.  Sadly, the domestic flights were earning revenue in rupees but spending in dollars for fuel and maintenance spares. Adding insult to injury, aviation came under the purview of the Ministry of Communications, which enabled government servants to exchange their ‘complimentary’ railway travel warrants for air tickets.

Meanwhile, tourism was not yet recognised as a potentially large source of foreign income. Those were the days of railways and rest houses. Domestic airports were maintained by the Civil Aviation Department at tremendous cost, until the commencement of the civil war in 1983, when they were handed over to the Sri Lanka Air Force (SLAF).

 After 1977 civil flying operations were privatised and aerial links with Jaffna maintained by private operators. At one time that was a thriving business. After 2009, domestic aviation gradually became dormant with the availability of better roads and expressways. The number of private helicopter operators reduced from seven to three. The Government expected the SLAF to fill the gap with their fixed- and rotary-wing aircraft, although it is strictly not legal for the military to operate civil passenger services under the Air Force Act. Accordingly, the SLAF accepted bookings on the basis of a ‘letter of indemnity’ signed by individual passengers in lieu of regular insurance.

 Then in June 2016, at the behest of the Government, a comprehensive World Bank Study was promulgated. The final report was critical of the SLAF operations. In Page 8 – ES2.1 it said…

 “On the supply side a key observation is that the GoSL (Govt of Sri Lanka) subsidises the market through the SLAF’s involvement in the management of domestic airports and in the provision of commercial air services.

 “Helitours plays a relevant role in the market as it contributes to serve and to generate demand for air services which might not be available otherwise. It must be noted though that the price distortion created by the subsidised fares makes it harder for private sector operators to enter the market and to compete effectively, and therefore retards the development of the domestic aviation industry.

 “In order to prepare the market for a level playing field and more open competition, it is recommended to clarify the role of the SLAF as operator of domestic airports and of air services and to address market distortions created by Helitours’ business model.”

 Consequently, in 2017 a Civil Aviation Policy was publicised to facilitate aviation, including aviation-related clubs and aerial adventure sports. Although passed in Parliament, that policy has largely not been implemented. Realising the potential for Sri Lankan domestic aviation in 2018, a company in the USA offered to establish and facilitate automatic weather observation and refuelling facilities. Sadly, they did not even receive an acknowledgement of their proposal from the Sri Lankan authorities.

Recently, when Sri Lanka declared bankruptcy, it was suggested at the National Issues Committee (NIC) of the Organisation of Professional Associations (OPA) that tourism could generate vitally needed US Dollars quickly, as the tourism infrastructure is already in place. The resource personnel at the panel discussion were from the frontline of the struggling domestic aviation industry. They, and others, suggested that domestic aviation could help to promote high end ‘luxury tourists’ who preferred to go from their departure point to their final destination in minimum time. The Minister of Tourism Harin Fernando also went on record saying that it should happen.

 The question today is why we cannot ‘jump start’ the domestic aviation industry to capture the high-end tourist market while making intra-island air travel affordable and popular for local passengers too.

 During the discussions fingers were pointed at the Regulator, Civil Aviation Authority Sri Lanka (CAASL), Airport and Aviation Sri Lanka (AASL), and the Sri Lanka Air Force (SLAF) for being more obstructive than facilitative as a direct result of their employment of personnel who are unprofessional, inefficient and unqualified. The overarching message was that domestic aviation and the tourism industry do not seem to work together as a team.

 Possible Solutions and the way ahead

·  Third level domestic airlines could be established to train and develop personnel for the international airlines, regional airlines and domestic aviation industry.

·   Air travel facilities available for tourists should be publicised abroad through our embassies/High Commissions.

·  Domestic aviation must be subsidised by the government, perhaps using the Tourism Development Fund. This Tourism Development Levy (TDL) should include a component for aviation or domestic aviation strategies, which is a lengthy process which takes time to begin functioning.

·   Utilise all 16 domestic airports available in Sri Lanka.

·   Domestic scheduled aviation successfully operated out by the Australians (ANA) in Ceylon in early Fifties. (Today only two operators exist.)

·   CAASL must liberalise and not use international standards (SARPS’s) rigidly on domestic services (alternative means of compliance could achieve equal or better safety standards).

·   The Government must not encourage subsidised airlines to distort the fair prices of domestic air travel. For example, the SLAF-operated Helitours model.

·   Encourage private investment.

·   Realistic CAASL security oversight (to facilitate and not to obstruct).

·   Keep in mind that it is always ‘Safety First.’

·   Available national industrial experts to be utilised.

·   Healthy competition to be established in a level playing field.

·   Domestic air service orientated and fully integrated with road and rail as suggested by the Aviation Policy of 2017.

·   Last but not least it was suggested that to move forward, Domestic aviation Industry should work closely with SLAITO (Sri Lanka Association for Inbound Tourist Operators) who has a seat in almost all the Tourist Development Forums.

The ‘National Issues Committee’ (NIC) of the Organisations of Professional Associations (OPA) handing over their report on the ‘Role of Domestic Aviation in SriLankan Tourism’ to the OPA President Attorney at Law Ms Ruchira Gunasekara, to be forwarded to President Ranil Wickremasinghe. From left: Chairman of the NIC Dr Sanath Hettige, NIC Member Capt. Gihan A Fernando, OPA President Attorney at Law Ms Ruchira Gunasekara, OPA President Elect Sarath Gamage and OPA General Secretary Attorney-at-Law Sujeewa Lal Dahanayake at the ceremony at the OPA Professional Centre.

The Present Situation

It was highlighted that after 1990 the industry was thriving. The nation had high hopes after the war. From 2016 to 2017 the market was not saturated; there was plenty of scope for expansion. Everyone wanted a piece of the pie. Until the 2019 Easter Sunday terrorist attacks, closely followed by the COVID-19 pandemic, changed the ‘landscape’. While the tourism industry was eligible for some concessions, they were not extended to the domestic aviation industry. It was then that it was realised that domestic aviation was not even considered under the auspices of tourism, and the Civil Aviation Authority Sri Lanka (CAASL) could not or did not help. Not being considered by the tourism industry as an important stake-holder was most disheartening.

In any aviation operation there must be a balance between safety, security and profitability. CAASL does not facilitate all this but blindly regulates (‘copy and paste’) to international SARP’s, with which domestic operators are expected to comply. It was a case of over-regulation. No opportunity is given to carry out alternative means of compliance which may result in equal or better safety standards. This also applied to Security oversight. Although CAASL should benchmark the requirement for domestic security, most security tasks within the island are still handled by the SLAF outside military airbases, resulting in unrealistic over-regulation.

 It is also a well-known fact that insurance companies still do not encourage high-end ‘luxury tourists’ to travel in single-engine fixed- and rotary-wing aircraft. They seem to be frozen in a 1950s time warp, although in reality modern engines are much more reliable and rigorously tested.

 Medical facilities available for tourists are also not yet on par with international standards, notably with no medical evacuation facilities available from hotels within Sri Lanka. Ideally there must be helipads at hotels and at regular intervals on expressways, to enable the airlift of accident victims to major hospitals.

 There is little or no advertising abroad of domestic aviation facilities available in Sri Lanka for foreign tourists. Here it is believed that the Sri Lankan diplomatic services in other countries should spearhead the advertising campaigns. It was also revealed that in the years 2018 to 2019 Cinnamon Air carried 12,000 passengers annually, of whom 90% were tourists. The World Bank Report projects a passenger growth in 2035 of 30,000 to 37,000 passengers annually. Available seat capacity must grow proportionately. Certainly, according to the World Bank study there is great potential in domestic aviation.

The Civil Aviation Policy based on the World Bank study also acknowledged that fact. Unfortunately, everyone was expecting the operators to deliver singlehandedly. In reality, other stake-holders in tourism and domestic aviation could complement each other in the industry. At present the two components are working independently. An air operator needs about 3 to 4 years to break even.

Today’s pressing need is a platform such as the OPA to appeal to higher authorities. At present, domestic aviation is in tatters, facing huge challenges. One operator declared that it had two aircraft on ground. An aircraft on ground is a loss. Instead of all stake-holders pulling in different directions, everyone must come together and work as a team. The Aircraft Owners’ and Operators’ Association (AOAOA) is attempting to do just that. Next to nuclear energy operations, aviation is the highest regulated industry. It cannot be over-emphasised that sometimes it is over-regulated.

Another important need is a different set of rules for Sri Lankan domestic aviation. Tourist traffic dwindled in the recent past, but fortunately arrivals are now picking up. Heavy investment is needed by operators. There must be a return on the investment for the sake of sustainability.

 Tourism is not in the primary stage; it has been in existence for more than 60 years. This is a timeline comparable with Singapore and the Maldives who are, instead, far ahead of Sri Lanka in that respect.

(To be concluded)