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Mattala Airport - A Success At Last?

| by Ruwantissa Abeyratne

You praise the firm restraint with which they write –
I'm with you there, of course:
They use the snaffle and the curb all right,
But where's the bloody horse? - Roy Campbell...On Some South African Novelists

( September 10, 2014, Montreal, Sri Lanka Guardian) It was very encouraging to read in the Sri Lanka press a few days ago that the land area in the vicinity of the new Mattala Rajapaksa International Airport is being snatched by investors and entrepreneurs who wish to build hotels and other infrastructure in the South Eastern coast of Sri Lanka, on the ground that the airport will be attracting numbers of tourists in the future who could be accommodated in those hotels and other premises. Obviously this is extremely good news for Sri Lanka which warms the cockles of the hearts of any Sri Lankan who wishes prosperity for his/her country. This would mean increased employment to Sri Lankans and more money in the country's coffers.

The above claim - of this new found potential for investment - is as per a Chinese newspaper, it is claimed.

All these investments, if they are real, have to be based on one fundamental premise - that airlines are queuing up to operate flights into the airport which became functional in March 2013. Right now there are mixed signals after one year of operations, where Air Arabia of Sharjah, after six weeks of operation, suspended services to Mattala because of a lack of passengers; and Fly Dubai connected its Eastern European passengers to Mattala only to also decide to temporarily suspend its operations. Etihad is reported to be evaluating the feasibility of operating its second flight to Sri Lanka to Mattala. SriLankan Airlines has established a hub at Mattala and Mihin Lanka operates flights to the airport. The Centre For Asia Pacific Aviation (CAPA), based in Sydney has reported that SriLankan Airlines is "gradually building up services at Mattala Rajapaksa International... while there are some opportunities to build up the local market, which consist primarily of inbound leisure and outbound labour traffic, Mattala is emerging as an alternative transit hub airport to Colombo.

SriLankan now links Mattala with five international destinations while sister carrier Mihin Lanka operates one route at Mattala. Both carriers plan to bolster their existing Mattala services with additional frequencies and start routing more international services via Mattala". CAPA also reported in May 2014 that SriLankan Airlines is the market leader at Mattala, accounting for 28 of the current 36 weekly scheduled movements. Mihin Lanka accounts for only two weekly movements while Abu Dhabi based Rotana Jet accounts for the remaining six movements.

So why would the airlines want to come to Mattala, which has so far served only as a transit point and not as a destination? Granted, the national parks of southeast Sri Lanka and the unspoiled beaches in the country’s isolated eastern region have tourism potential, but the domestic traffic potential between Mattala and Colombo has always been dismal. Airlines operate on traffic demand, of which the basic determinants are what the travelling public look for - services, pricing and value for money. Airlines carry out an air traffic forecast for their fleet planning and route development which are the key elements of their operating plan. Air transport is a complex, cost intensive industry which has to operate on a risk based business model that takes into account changes in the economic and political environment of a destination. One approach adopted is the development of a baseline model on the demand for revenue passenger kilometers. Another has been based on how the network structure of an airline, together with its operating philosophy and fixed and variable costs might mesh with the inclusion of a new destination in its network.

So what makes an airport attractive to airlines? An example can be found in Stansted where the new owners Manchester Airports Group attracted its first new airline, just one month after taking ownership of the Airport by convincing Air Moldova to move its UK flight operations from Gatwick to Stansted. The owners of the airport spent £40 million to upgrade the terminal and security areas - to transform the experience for passengers by making the airport more attractive to airlines looking to move into or expand in London.

Perhaps the airport at Mattala does not need the infrastructure investment. But there seems to be a serious inconsistency in the planning philosophy. Countries usually develop and introduce additional airports when there is a capacity overflow at existing airports, where air carriers will be forced to use the second airport. Sri Lanka is building a brand new terminal 2 at its main airport at Katunayake which will cater to the extra traffic envisioned in Sri Lanka. There would obviously be no spill over for Mattala to benefit from. The only way that Mattala could come up on its own is for airlines to identify a new category of traveller to Sri Lanka who would prefer not to land in Colombo, but stick around during his entire stay in the South East of Sri Lanka or use it as a transit point, taking advantage of the fact that any flight from the rest of Asia will take 30 minutes less to arrive in Sri Lanka at Mattala than at Katunayake. If Mattala remains a transit point there does not seem to be a justifiable demand for all the hotels to be built in the region. Perhaps the Etihad study would be a good bench mark.

One of the ways to ensure improved traffic at Mattala is to make Mattala attractive to airlines and passengers in its own right. It was envisioned in the planning process that one of the business aims attributed to the new airport at Mattala, which serves the city of Hambantota, southeast of Sri Lanka, is the establishment of an aerotropolis. This makes sense, particularly for tourism purposes as well as for boosting the local economy and for creating jobs, which are also identified as business aims for the new airport. However, an aerotropolis is a vast project of its own and has to be carefully planned through a viable business case. Hambantota is geographically located east to west of the shipping and air route. This location has the potential of being a busy and profitable international business hub.

Mattala has many advantages. Its unexploited land in and around the airport as well as land in Hambantota, the pristine beaches and vast business potential for high end as well as modest hotels, could help expand the aerotropolis experience beyond the airport. Theme parks, water parks and other entertainment could be built around the area taking advantage of the available land. This would enable tourist to enjoy their vacation without leaving the southeast of the country.

Let's hope there is more planning, investment and diplomatic efforts to coax countries to send their airlines to Mattala and the airlines come. Then the snaffle, the curb and the bloody horse will all be comfortably positioned in a row.

The author is an aviation consultant in Montreal.

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