A total of four routes were launched last week at Colombo, the capital of Sri Lanka. Mihin Lanka, the country’s own low-cost operator, continued its expansion in India, while Turkish Airlines connected Colombo to its Istanbul Atatürk hub via Malé. Only one airport serves Sri Lanka’s scheduled international traffic at the moment, supported by a network of 13 domestic facilities.
High market sensitivity
While 2012 data has not been released yet, examination of historical data shows that Sri Lankan air traffic growth shows fairly high volatility. A small slump in traffic in 2001 was quickly recovered and the industry grew at an average rate of 11.8% over the next six years (despite the 2004 Tsunami). Only a combination of the global economic situation and internal security problems then resulted in traffic loss of respectively 5.7% and 7.3% in 2008 and 2009.
In 2010, passenger numbers climbed by an astonishing 24%, as a result of increased interest from both businesses and individuals following the end of Sri Lanka’s decades-long internal conflict. The landmark achievement of surpassing five million passengers for the first time in history failed to have last however, and in 2011 traffic contracted by 7%.
Mihin Lanka doubles in size
Capacity data for w/c 11 February 2013 reveals that Sri Lankan Airlines, the country’s flag carrier, remains the largest carrier operating at Colombo Airport. In fact, it increased its market share (as measured in weekly seats) by 3.5 percentage points compared to the corresponding period a year before, and now offers 52.2% of all seats. Moreover, Sri Lankan’s low-cost subsidiary, Mihin Lanka, expanded dynamically over the past year (120% annual increase in February 2013), and now commands 10% of Colombo Airport’s capacity. New routes from Mihin Lanka since February 2012 include services to Bahrain (previously operated by Sri Lankan for four decades), as well as flights to three points in India – Delhi, Varanasi and Gaya, which launched last week.
The third-largest carrier operating to Sri Lanka is Emirates, which currently offers twice-daily services from Colombo to its Dubai hub, as well as daily frequencies each to Malé in the Maldives and Singapore. Admittedly, the MEB3 carrier marginally reduced its capacity to Sri Lanka following fleet adjustments, but it was the rapid growth of Mihin Lanka that made Emirates lose its #2 position.
Indian routes dominate
Just under a quarter of all international seat capacity offered in Colombo can be attributed to Indian routes. Following Kingfisher’s demise last year, five airlines are currently active in the market. Sri Lankan and Mihin Lanka dominate the market (respectively 57% and 17%) followed by Jet Airways, which halved its February 2013 offering compared to the corresponding period last year (this included the shelving of its Delhi service).
New domestic airline in March 2013
According to OAG Schedules iNet data for w/c 11 February 2013, Sri Lankan AirTaxi, the domestic subsidiary of Sri Lankan, provides all scheduled services in the country at the moment. The carrier, which operates a small fleet of two 15-seater DHC-6 Twin Otters, offers a total of 28 weekly frequencies on 10 routes, nine of which involve airports serving the capital – Colombo (4 routes), Kelaniya (3) and Colombo City (2).
According to a recent announcement, this small but cosy monopoly is set to be spiced up as a new domestic operator, Cinnamon Air, launches in late March 2013 with a number of routes from Colombo (CMB). The Cinnamon start-up is owned by Saffron Aviation (are you getting the spice theme now?) whose director, Romesh David, says the airline will offer: “initially offer daily flights, or four a week, to different parts of the country…leisure travel is the main focus, and we aim at cutting travel time to popular tourist destinations.” However, the launch of the airline, which operates two each Cessna 208 and 208B (seating nine and 12 respectively), was initially scheduled for late 2012 and, even now, is yet to be granted government approvals.