The Hindu Business Line : Trade sees change in SriLankan management impacting India

New Delhi, Jan. 9 The Dubai-based Emirates airline is not to renew the shareholder agreement for SriLankan, the island nation’s airline when it expires on March 31 this year.

In a statement the President of Emirates and Managing Director, SriLankan, Mr Tim Clark, has said that Emirates had notified the Sri Lankan Government about not renewing the shareholder’s agreement when it expires.

The statement has raised fears in sections of trade and industry that the transfer of management could not only see a review of the 100 weekly flights that SriLankan operates to India but possibly also an end to the regime of low fares that it offers. In the past the airline was offering fares to Bangkok for Rs 12,000, while a non-stop flight between Delhi and Bangkok was at least Rs 5,000-6,000 higher.

“The airline could review its strategy and decide whether it makes sense to operate flights on some low yield routes rather than deploying the aircraft on more profitable routes,” a senior airline official said.

What this could translate into is a possible review of increasing flights here. Shortly after launching its 100 weekly flight to India, the airline Chief Executive Officer, Mr Peter Hill, said this was not good enough and the airline would like to touch 150 weekly flights in the next five years. The airline used to operate 45 flights a week to eight Indian cities till 2003.

‘No cause for alarm’

India is an important market for the airline. During the financial year 2006-07, India accounted for 32 per cent of the airline’s global traffic carrying 1.1 million passengers to and from India.

What impact the Emirates decision would have on India remains to be seen. While SriLankan officials were not available to comment on the impact of change in management, Sri Lankan tourism in a statement said there was no cause for alarm for stakeholders of Sri Lanka tourism as it is expected that normal operations will continue after the transfer.

“We expect the transfer of management from the Emirates to the major shareholder to be smooth with minimum impact on tourism operations. We also expect the focus on the destination to be even more now and request all our partners to be confident and work in tandem with the airline to assist in a smooth management transition process,” the statement adds.