World Bank report notes Sri Lanka’s failure to fully capitalize its hold on the Sri Lanka-India air routes
A recent report issued by the World Bank has pointed out that Sri Lanka has been unable to fully capitalize on the near-monopoly position it holds on the Sri Lanka-India air routes.
The report has stated that the positive impacts of air service liberalisation between Sri Lanka-India could have been much higher if it wasn’t for structural weaknesses of domestic carriers.
Capacity constraints from the lack of aircrafts and poor service quality have been the main contributors.
SriLankan Airlines’ small fleet of 25, faces competing demand from East and South East Asia routes and is unable to operate on profitable Indian routes, a local media report has quoted the report as stating.
The report, ‘A Glass Half Full: The Promise of Regional Trade in South Asia’, has stated that Sri Lankan carriers only face limited competition, mainly on three out of the 10 routes between Sri Lanka and India.
The lack of competition has also partially pushed up airfare on these routes.
OSL take:
The contents of the World Bank report are indicative of an investment opportunity in Sri Lanka’s aviation sector. Sri Lanka’s national carrier, SriLankan Airlines is currently the operator of flights from Sri Lanka to India. The Sri Lankan government is looking at forming a joint venture partnership with a foreign aviation company to expand operations of SriLankan Airlines. The government is also looking at developing the country’s domestic aviation sector. All these indicate growing business opportunities in Sri Lanka’s aviation sector.
| Article Code : | VBS/AT/20181019/Z_3 |