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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2527

Tiger bows out from Sri Lanka

By Gopal Ethitraj
Colombo, 01 July, (Asiantribune.com):

Tiger Airways, the leading low cost carrier of Singapore, has decided to terminate operations in Sri Lanka from September this year. They were about one year in operation in this sector. Their key destinations from Colombo are Singapore,Malaysia, Australia, Bali and Indonesia. The key reason for pulling out was not enough returns.

Launched on 31 May last year with much fanfare, the airlines started with three flights a week, stepped up to four from October last year, and has transported approximately 35,000-40,000 passengers within the year. Although in terms of the numbers, they have achieved their targets, the 180 seat carriers mostly came half full from other destinations.

“We only have to fill 50-60% of the aircraft, which we have done successfully. With the 80-85% load factor the carrier runs on, the airlines should ideally be able to breakeven and make profit. However, two key reasons prevent this, MAC Holdings Aviation Division General Manager Thisum Jayasuriya said.

“This is a price sensitive market. Major airlines such as Cathay Pacific, Emirates and Singapore Airlines, etc. are selling low cost fares in this market, over and above the onward passengers and cargo handling. This makes it hard for budget carriers to operate. now it is not viable for low-cost airlines to operate from Sri Lanka. I believe these were the same reasons for AirAsia to pull out as well.”

The Sri Lankan aviation system currently has no concessions for low-cost airlines, which also makes it harder for those carriers to compete among the bigger names, he said. The airport and aviation ground handling charges were the same for all airlines. “If the Government can come up with a system that considers giving concessions for budget carriers, it will encourage those present to stay on as well as lure in other names to come in and serve our market.”

Low-cost airlines currently in Sri Lanka include Air Arabia, flydubai, SpiceJet, Air India Express and the State-owned budget carrier Mihin Lanka.

The budget airline although had made the decision three weeks ago, now it has started conferencing those who had booked for the period beyond August and finding some alternatives, full refund to passengers, or if they wish, they could even change the ticket and bring it forward to a date before the termination of services with no additional chargers.. A total of 700 passengers have made bookings for the period between August and December 2013, according to MAC Aviation Services Ltd., the General Sales Agent for Tiger Airways.

- Asian Tribune -

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