The Hindu Business Line : Indian private airlines entry

THE arrival of the two Indian private sector domestic airlines — Jet Airways and Air Sahara — on the India-Sri Lanka route has not got the Sri Lanka's national airline, SriLankan, unduly worried.

"We sincerely think that there is enough traffic for all the airlines including the two new airlines from India to operate on the sector," SriLankan Airlines, Regional Manager (Asia and Pacific), Mr Mohamed Fazeel, told Business Line during an exclusive interview at the airline's headquarters here.

Both Jet Airways and Air Sahara launched their international operations on Tuesday with direct flights from Chennai. The two Indian private sector airlines have already announced that they will operate a daily flight between Chennai and Colombo.

On the issue of whether the arrival of more airlines on the India-Sri Lanka route would lead to a fare war, the SriLankan airline Chief Executive Officer, Mr Peter Hill, felt that while there may be some pressure on the yields, but added that it was still to early too say whether there would be any southward movement in airfares between the two neighbouring countries.

"We have not reacted by dropping fares dramatically. Market forces will dictate at what level the prices should establish themselves," Mr Hill added. Similarly, the Chief Executive Officer, Air Sahara, Mr U.K. Bose, felt it was wrong to say that there will be any fare war and added that a fare war does not work.

SriLankan officials point to the fact that fares on the Sri Lanka-India, especially to cities in southern India were so low that it will be impossible to lower them any further. "The one-way fare on the Colombo-Thiruvananthapuram sector is Rs 2,500 which does not even meet the handling and fuel cost of operating on the route, so how can any airline think of further pushing down fares," SriLankan airline officials argued.

While SriLankan airline officials maintain that the airline has no immediate plans to meet the lower promotional fares on the India-Sri Lanka route which are available in the market, industry analysts feel that the situation could change when the lean season starts and there are not enough air travellers for all airlines to operate to full capacity.

But despite such doubts there is unanimity among all the airlines that the arrival of more airlines will see travel between India and Sri Lanka grow by leaps and bounds. "We are looking at bringing close to 1,50,000 Indians to Sri Lanka up from around 80,000 last year," Mr Bose added.