• Tuesday, September 21, 2021
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Business

Sri Lanka offers tax cuts to revive its airport

Kimali Fernando, chairperson of the Sri Lanka Tourism Promotion Bureau, a government body, denied a report in the local Sunday Times that said the sector would re-open in mid-June (Photo: Ishara S.KODIKARA/AFP via Getty Images).

By: Radhakrishna N S

SRI LANKA’S new government Friday (28) offered tax breaks and subsidised fuel to revive the island’s second international airport built with Chinese loans but which ended up a white elephant.

Authorities announced plans to suspend the $60 departure tax for two years and allow airlines free landing and parking after scheduled carriers abandoned Mattala Rajapaksa airport.

Ground handling services will also be offered at discounted rates while migrant workers flying out of the airport 250 kilometres (150 miles) from Colombo will be offered concessionary fares.

Budget carrier Flydubai was the last scheduled operator to pull out of the airport, which is named after former president Mahinda Rajapaksa.

The previous administration, which lost the November presidential election to Rajapaksa’s younger brother Gotabaya, had been in talks with neighbouring India to revive the airport as an aircraft maintenance facility.

It was not immediately clear if the new government had abandoned those plans but the country’s cabinet said in a statement they wanted scheduled passenger services to resume.

The airport a five-hour drive from the capital is in the middle of a migratory route for birds.

Several aircraft have hit birds since it opened in 2013, and four years ago the military deployed hundreds of troops to clear deer, wild buffalo and elephants off the sprawling facility.

The airport, which cost an initial $210 million and employs about 550 workers in Rajapaksa’s home district, has failed to generate enough business to pay staff, let alone make a profit.

The first foreign airline to operate out of the facility was Air Arabia in 2013 but they pulled out after six weeks of scheduled services. Flydubai quit in June 2018 without giving a reason, but officials said poor passenger traffic may have spurred the budget carrier to leave.

Even Sri Lanka’s national carrier, Sri Lankan Airlines, stopped flying to Mattala in 2015 soon after Rajapaksa was defeated in the January 2015 elections. Sri Lankan later said they saved $18m annually by not flying to the airport.

But the facility has remained an emergency alternate landing location for flights heading into Colombo International, about 30 minutes away by air.

In 2017, China took over a loss-making deep-sea port at Hambantota, in the same area as the airport, on a 99-year lease under a $1.1m deal, sparking concern in neighbouring India.

(AFP)

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