| by Ruwantissa Abeyratne

( January 16, 2015, Montreal, Sri Lanka Guardian) A change in government has inevitably affected aviation in Sri Lanka whenever it occurred. Apart from changes made to top positions in civil aviation, a new regime in Sri Lanka has also tried to review air transport policy in the country with a view to rejuvenating the industry and seizing lost opportunities of the past. In this context, one of the tasks that the new government of Sri Lanka may have on its agenda is to maximize the potential of the country's assets which are currently not bearing dividends. One such asset (which has been called a white elephant and a liability as it is underutilized vis a vis its cost) is undoubtedly the airport at Mattala. It could well have been that the planners of the airport failed to adequately evaluate the traffic distribution patterns between the existing international airport and a new one. They obviously overbuilt infrastructure and facilities for non-existing demand and traffic that was unlikely to be generated.

Once a thorough feasibility study is conducted and a strategic revival plan is ready for implementation, existing bilateral air services agreements may have to be re-negotiated through consultations or through the more expeditious method of third party notes.
However, there is hope yet. This is not the first time this misjudgement has occurred in airport construction and development. Mirabel International Airport in Quebec, built in the early seventies received 3 million passengers whereas it was built for 6 to 10 million passengers. London Stansted Airport was deserted when it was opened for traffic for several years. The same happened in Osaka where a second airport failed to gain traffic due to an already existing popular airport being the continued favourite. Perhaps the most glaring example was Washington DC's Dulles International Airport which went empty for two decades where preferences still remained with Reagan International. But they all were revived through prudent policy and economic management. Maybe now's the time for Sri Lanka to put the wheels of revival in motion for Mattala airport.

What a second airport needs, particularly when the first airport is not overflowing, is planning on possible patterns of traffic that might develop in the new airport based on competition between the airlines that operate air services into the country and the competition itself between the existing airport and the new one. This requires strategic vision and dynamic management through incentives, promotional programmes and the creation of passenger spending opportunities. Offering different characteristics to the passenger which are not found in the existing airport and its environment, and incentives that would enable airlines to optimize their earnings through a package of opportunities would be paramount considerations.

In an article published earlier, the author said that 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.

Perhaps a good start that would serve as an impetus to possible new-entrant airlines would be to consider a possible linkage between the airport at Katunayake and the airport at Mattala. This linkage could be achieved by transport links such as a high speed rail system and an expressway (which is already in existence) where the two cities could cumulatively cover a larger demographic spread and ensure extended commercial and leisure activity. For example in the United States, Baltimore and Washington airports, which are approximately 70 kilometres apart allow suburban populations in Washington to choose and even prefer using Baltimore over the National Airport or Dulles Airport in closer proximity to Washington. Another example is Tokyo, where the extreme congestion of the inner city is ameliorated by airports within 2 to 3 hours of Tokyo.

Another consideration for reviving Mattala as a viable airport would be to make it attractive to the passenger more as a hub airport than as a terminus in Sri Lanka. In other words, if the airlines operating to Sri Lanka and beyond were to offer Mattala as an attractive airport, airlines currently operating into Sri Lanka and new entrants could be convinced to operate air services to Mattala connecting to onward points while offering attractive stay-over packages. For this of course to attain fruition, Mattala should be able to offer both compelling leisure activities that would beat both those of Colombo and the Maldives while offering reasonable business facilities. Tourists from Asia/PAC and South Eastern parts of Asia travelling onward to the west and those from the West seeking a combination of leisure and business activities should find in Mattala and experience that is not found in Colombo, or for that matter the Maldives.

The key drivers to these concepts would lie in two fundamental aspects of enterprise governance: marketing and competition. Sri Lanka could approach the revival of Mattala as a competitive measure against the better subscribed international airport at Katunayake as well as competition to Male which is just a 45 minute flight from Colombo.

Once a thorough feasibility study is conducted and a strategic revival plan is ready for implementation, existing bilateral air services agreements may have to be re-negotiated through consultations or through the more expeditious method of third party notes.

The above considerations are but two or three of a host of possibilities for Mattala. The initial step in planning would involve for the Ministry of Aviation the formation of a team of regulatory, policy making and economics experts to consider all possible avenues that existing potential at Mattala offers, not only from a geo-aesthetic point of view but also from an economic and business angle, with competition and marketing as the key drivers behind the revival.

Good leadership and governance would be the fundamental postulate in this exercise. "Leadership" is doing the right thing, and "governance" is doing things right. Leadership, involves not being surprised at any unexpected event or circumstance. Essential to this process is the prompt identification of developments in the areas of science, technology and society that are likely to ensure future benefits both from a business and social perspective. Governance drives leadership through the following practices. a) anticipatory intelligence, i.e. providing background information and an early warning of recent developments; b) direction-setting, i.e. establishing broad guidelines for the corporate strategy; c) determining priorities, i.e. identifying the most desirable lines of R & D as a direct input into specific (funding) decisions; d) strategy formulation, i.e. participating in the formulation and implementation of strategic decisions; and e) innovation catalysing, i.e. stimulating and supporting innovation processes between the different partners.

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.

The author is former Head of International Relations at Air Lanka and is currently an aviation consultant in Montreal. He worked at the International Civil Aviation Organization for 23 years as Senior Air Transport Officer and Senior Legal Officer.



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